Spain, Split and Talk: Quantifying Regional Independence

Hanna Adam, Mario Larch and Jordi Paniagua ()
Additional contact information
Hanna Adam: University of Bayreuth
Mario Larch: University of Bayreuth. CEPII, CESifo, ifo Institute, GEP

No 2409, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: We quantify the economic impact of a potential secession of Catalonia from Spain. Using a novel dataset of trade flows between 17 Spanish sub-national regions and 142 countries, we estimate the effects of different levels of borders on trade flows and uncover heterogeneity in regional, national, and EU border effects. We use a general equilibrium analysis of trade with fiscal transfers to understand the consequences of a potential secession with political uncertainty. In counterfactual experiments, we impose new borders on Catalan regional and international trade, potentially within or outside the EU, resulting in a welfare decline for Catalonia and Spain.

Keywords: international trade; regional trade; border effects; regional independence (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 H77 R12 (search for similar items in EconPapers)
Date: 2024-09
New Economics Papers: this item is included in nep-geo, nep-int and nep-ure
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http://repecsrv.uv.es/paper/RePEc/pdf/eec_2409.pdf First version, 2409 (application/pdf)

Related works:
Working Paper: Spain, Split and Talk: Quantifying Regional Independence (2024)
Working Paper: Spain, Split and Talk: Quantifying Regional Independence (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:2409

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