Tear down this wall: on the persistence of borders in trade

Volker Nitsch and Nikolaus Wolf

Canadian Journal of Economics, 2013, vol. 46, issue 1, 154-179

Abstract: Why do borders still matter for economic activity? The reunification of Germany in 1990 provides a unique natural experiment for examining the effect of political borders on trade. With the fall of the Berlin Wall and the rapid formation of a political and economic union, strong and strictly enforced administrative barriers to trade between East Germany and West Germany were eliminated completely within a very short period of time. Remarkable persistence in intra-German trade patterns along the former East-West border suggests that border effects are neither statistical artefacts nor driven by administrative barriers to trade, but arise from economic fundamentals.

JEL-codes: F14 F15 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (70)

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Journal Article: Tear down this wall: on the persistence of borders in trade (2013)
Working Paper: Tear down this wall: on the persistence of borders in trade (2013)
Working Paper: Tear Down this Wall: On the Persistence of Borders in Trade (2010)
Working Paper: Tear Down this Wall: On the Persistence of Borders in Trade (2009)
Working Paper: Tear Down this Wall: On the Persistence of Borders in Trade (2009)
Working Paper: Tear Down this Wall: On the Persistence of Borders in Trade (2009)
Working Paper: Tear Down this Wall: On the Persistence of Borders in Trade (2009)
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