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Gross Product, Population Distribution and Heterogeneity of Border Effects in Gravity Models of Trade.
- Source :
- Open Economies Review; Jul2024, Vol. 35 Issue 3, p605-621, 17p
- Publication Year :
- 2024
-
Abstract
- In this paper, I estimate a gravity model that provides strong evidence that border effects are heterogeneous by region and test for the presence of the spatial attenuation effect and international market access costs. I introduce GDP, importer population density, and importer metropolitan statistical area count as determinants of the border effect. I find the strong and robust result that border effects are decreasing in the GDP of the importing and exporting region: a 10% increase in importer GDP results in a 3.24% to 3.67% increase in international trade relative to domestic trade while a 10% increase in exporter GDP results in an increase in international trade relative to domestic trade by between 2.41% and 2.68%. These results are robust to a variety of specifications and indicate the existence of the spatial attenuation effect. However, this paper finds no indication of market access costs differing significantly when trade crosses the U.S.-Canada border. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 09237992
- Volume :
- 35
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- Open Economies Review
- Publication Type :
- Academic Journal
- Accession number :
- 178460250
- Full Text :
- https://doi.org/10.1007/s11079-022-09679-1