Intra-national home bias: New evidence from the United States commodity flow survey

Valeriano Martinez-San Roman, Ingrid Mateo-Mantecón and Rubén Sainz-González

Economics Letters, 2017, vol. 151, issue C, 4-9

Abstract: This paper estimates the US intra-national home bias in trade using Poisson Pseudo-Maximum Likelihood methodology to complement and extend Wolf’s (2000) work. We use Wolf’s data from the 1993 Commodity Flow Survey (CFS) and add the 1997, 2002, 2007, and 2012 waves. We claim that Wolf’s home bias magnitude is overestimated due to the log-linearization of the gravity equation and the control for distance used in the cross-sectional study. Our results with panel data and latest econometric estimators show that the levels of US States home bias are in between 50% and 60% lower than in Wolf’s. However, since 2002 the home bias has experienced substantial growth, which suggests that the US market is less commercially integrated in 2012 than in 1993.

Keywords: Home bias; Gravity; Trade; United States; CFS; PPML (search for similar items in EconPapers)
JEL-codes: C13 C23 F11 F14 F15 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:151:y:2017:i:c:p:4-9

DOI: 10.1016/j.econlet.2016.11.038

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