Federalism, separatism and international trade

Marie Daumal

European Journal of Political Economy, 2008, vol. 24, issue 3, pages 675-687

Abstract: This paper explores whether countries that have a federal Constitution engage in more international trade. We identify two possible mechanisms through which political fragmentation of nation-states, namely federalism, might impact positively on trade globalization processes: domestic market fragmentation and the free trade strategy pursued by certain separatist regions in federal countries. We use a gravity equation running panel regressions to estimate the impact of federalism on trade. The Poisson estimator proposed by Santos Silva and Tenreyro (2006) is used to handle the null trade flows. We test our predictions on a large data set of 148 countries on the 1980-2002 period. After controlling for determinants of trade potentially correlated with federalism, a federalist system is found to increase international trade. We also find that separatism and linguistic fractionalization impact positively on trade openness.

Date: 2008

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V97 ... e06acc5c90b760fa8998
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:poleco:v:24:y:2008:i:3:p:675-687

Access Statistics for this article

European Journal of Political Economy is edited by J. De Haan, A. L. Hillman and H. W. Ursprung

More articles in European Journal of Political Economy from Elsevier
Series data maintained by Heidi Boesdal ().