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articles: Spatial markets and the potential for economic integration between Canadian and U.S. regions

Author

Listed:
  • W. Mark Brown

    (Departments of Geography and Agricultural Economics, McGill University, Burnside Hall, 805 Sherbrooke Street West, Montreal, QC H3A 2K6, Canada)

  • William P. Anderson

    (Department of Geography, Boston University, 675 Commonwealth Avenue, Boston, MA 02215-1401, USA)

Abstract

The potential for further economic integration among Canadian and American regions is measured by comparing province-to-state trade with state-to-state trade, where the latter is used as a benchmark of integration. To accomplish this, an attraction constrained gravity model is derived from micro foundations and estimated. The analysis demonstrates that after controlling for variations in output, distance, wages, productivity, and localization economies, the border remains a significant barrier to trade, although much less than previous estimates of the border effect using internal Canadian trade as a benchmark. The model's results also indicate that the border's influence varies across sectors, and the influence appears to be, in part, related to the presence of tariff and non-tariff barriers.

Suggested Citation

  • W. Mark Brown & William P. Anderson, 2002. "articles: Spatial markets and the potential for economic integration between Canadian and U.S. regions," Papers in Regional Science, Springer;Regional Science Association International, vol. 81(1), pages 99-120.
    • Handle: RePEc:spr:presci:v:81:y:2002:i:1:p:99-120
    Note: Received: 1 February 1999
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    Citations

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    Cited by:

    1. Brown, W. Mark, 2003. "Overcoming Distance, Overcoming Borders: Comparing North American Regional Trade," Economic Analysis (EA) Research Paper Series 2003008e, Statistics Canada, Analytical Studies Branch.
    2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    3. Brown, W. Mark, 2003. "Vaincre les distances, vaincre les frontières : comparaison des échanges régionaux en Amérique du Nord," Série de documents de recherche sur l'analyse économique (AE) 2003008f, Statistics Canada, Direction des études analytiques.
    4. Amir Maghssudipour & Annalisa Caloffi & Marco Bellandi & Letizia Donati, 2022. "Language as a regional driver of the trade of place-sensitive products: The case of made-in-Italy goods," Working Papers - Economics wp2022_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    5. Hirokazu Ishise & Miwa Matsuo, 2015. "US–Canada border effect between 1993 and 2007: smaller, less asymmetrical, and declining," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 291-308, May.
    6. James E. Anderson & Yoto V. Yotov, 2010. "The Changing Incidence of Geography," American Economic Review, American Economic Association, vol. 100(5), pages 2157-2186, December.
    7. James E. Anderson & Catherine A. Milot & Yoto V. Yotov, 2014. "How Much Does Geography Deflect Services Trade? Canadian Answers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(3), pages 791-818, August.
    8. Robby K. Bemrose & W. Mark Brown & Jesse Tweedle, 2020. "Going the distance: Estimating the effect of provincial borders on trade when geography (and everything else) matters," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1098-1131, August.
    9. Murat Celik, H. & Guldmann, Jean-Michel, 2007. "Spatial interaction modeling of interregional commodity flows," Socio-Economic Planning Sciences, Elsevier, vol. 41(2), pages 147-162, June.
    10. James E. Anderson & Catherine A. Milot & Yoto V. Yotov, 2011. "The Incidence of Geography on Canada's Services Trade," NBER Working Papers 17630, National Bureau of Economic Research, Inc.
    11. Federico Fantechi & Ugo Fratesi, 2023. "Border Effects on firm's productivity: The role of peripherality and territorial capital," Papers in Regional Science, Wiley Blackwell, vol. 102(3), pages 483-506, June.
    12. John R. Baldwin & W. Mark Brown & Wulong Gu, 2012. "Geographic market access and the effects of trade on length of production run, product diversity and plant scale of Canadian manufacturing plants, 1974--1999," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 455-484, March.
    13. Baldwin, John R. Beckstead, Desmond Brown, W. Mark Rigby, David, 2007. "Économies urbaines et productivité," Série de documents de recherche sur l'analyse économique (AE) 2007045f, Statistics Canada, Direction des études analytiques.
    14. Joan Costa‐Font & Eduardo Rodriguez‐Oreggia, 2005. "Trade and the Effect of Public Investment on Regional Inequalities in Heterogeneously Integrated Areas," The World Economy, Wiley Blackwell, vol. 28(6), pages 873-891, June.
    15. Mark Brown, W. & Anderson, William P., 2015. "How thick is the border: the relative cost of Canadian domestic and cross-border truck-borne trade, 2004–2009," Journal of Transport Geography, Elsevier, vol. 42(C), pages 10-21.
    16. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    17. Ramon Tremosa-i-Balcells & Joan Costa-i-Font, "undated". "The "relative competitiveness" patterns of Spanish regions after the European Monetary Union (1999-2002)," Studies on the Spanish Economy 169, FEDEA.
    18. Sébastien Breau, 2010. "Low-Income-Country Import Competition and the Structure of Earnings Inequality in Canada, 1996–2001," Environment and Planning A, , vol. 42(8), pages 1964-1986, August.
    19. Baldwin, John R. Beckstead, Desmond Brown, W. Mark Rigby, David, 2007. "Urban Economies and Productivity," Economic Analysis (EA) Research Paper Series 2007045e, Statistics Canada, Analytical Studies Branch.

    More about this item

    Keywords

    Border effect; gravity model; Canada-U.S. trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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