Disentangling the importance of international border effects. Some evidence from Portugal–Spain based on diesel retailers
Jacint Balaguer () and
Jordi Ripollés ()
Economic Modelling, 2018, vol. 72, issue C, 260-269
This paper takes into consideration that, in the presence of cross-region heterogeneity in the distribution of within-region price differentials, the impact of borders can be much smaller than those suggested by the empirical strategy typically employed in the literature. By exploiting a large dataset on petrol stations, it is shown that the impact resulting from a standard method can be significant even from an imaginary border. This meaningless outcome is straight forwardly corrected by basing the work on a quasi-experimental design intended to disentangle the impacts of heterogeneity and border. An application to know to what extent the political boundary between Portugal and Spain affects price dispersion in terms of driving time is carried out. We found an irrelevant border effect for the intra-national regions, which contrasts with a significant although moderate impact for the international border. That is, the Portugal–Spain border is at most equivalent to an additional driving time between petrol stations of about five minutes.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:72:y:2018:i:c:p:260-269
Access Statistics for this article
Economic Modelling is currently edited by S. Hall and P. Pauly
More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Haili He ().