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Intra-national trade costs: Assaying regional frictions

Delina E. Agnosteva, James Anderson () and Yoto Yotov

European Economic Review, 2019, vol. 112, issue C, 32-50

Abstract: The effects of intra-regional, inter-regional and international frictions on the trade flows of Canada’s provinces are disentangled by gravity model techniques. Unexplained Trade Barriers (UTBs) are the difference between inter-provincial trade barriers inferred from pair fixed effects and from bilateral distance and contiguity. The estimates reveal large intra-national trade costs and UTBs that vary significantly across Canada’s provinces. Decomposition of UTBs into relative border effects and a systematic residual UTB is based on a novel Cobb–Douglas aggregator of intra-provincial and pure inter-provincial trade costs. Variation of both components across provinces is big.

Keywords: Intra-regional and inter-regional Frictions; Border frictions; Unexplained trade barriers; Canada (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.euroecorev.2018.11.008

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