Going the Distance: Estimating the Effect of Provincial Borders on Trade when Geography Matters

Jesse Tweedle, Mark Brown and Robby Bemrose

Analytical Studies Branch Research Paper Series from Statistics Canada, Analytical Studies Branch

Abstract: For many goods, such as dairy products and alcoholic beverages, the presence of substantial (non-tariff) barriers to provincial trade is widely recognized. If these non-tariff barriers matter, intraprovincial trade should be stronger than interprovincial trade, all else being equal. However, comparing intraprovincial and interprovincial trade levels is challenging, because intraprovincial trade is heavily skewed toward short-distance flows. When these are not properly taken into account by gravity-based trade models, intraprovincial trade levels—provincial border effects—tend to be overestimated.

Keywords: Domestic; trade (search for similar items in EconPapers)
Date: 2017-09-14
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp3e:2017394e

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