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The Border Effect in the Japanese Market: A Gravity Model Analysis

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  • Toshihiro Okubo

    (University of Michigan, Institut Universitaire de Hautes Études Internationales, Geneve 21, Suisse)

Abstract

This paper uses a Gravity Model to analyze the border effect in the Japanese market, which indicates how biased interregional trade is compared with international trade. The results suggest that the border effect in Japan is much lower than in the United States and Canada, and has declined year by year between 1960 and 1990. Possible reasons for the decline include the reduction of tariff rates and non-tariff barriers, the surge of foreign direct investment, and the appreciation of the yen.

Suggested Citation

  • Toshihiro Okubo, 2003. "The Border Effect in the Japanese Market: A Gravity Model Analysis," Working Papers 494, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:494
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    File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r494.pdf
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    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
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    5. Wall, Howard-J, 2002. "Has Japan Been Left Out in the Cold by Regional Integration?," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(2), pages 117-134, April.
    6. Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September.
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    More about this item

    Keywords

    Gravity Model; Border effect; Interregional trade; International t;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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