Explaining National Border Effects in the Quad Food Trade

Alessandro Olper and Valentina Raimondi ()

No 25467, 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists

Abstract: Starting from a theoretically consistent gravity model, this paper first provides estimates of bilateral 'border effects' in food trade among Quad countries (Canada, USA, Japan and EU) at the ISIC 4-digit level. Then, it investigates the underlying reasons of border effect, assessing the role played by policy barriers (tariffs and non-tariff barriers) with respect to barriers unrelated to trade policy, such as information related costs and cultural proximity. In contrast with several previous findings, we show that policy barriers are part of the story in explaining the strong trade reduction effect induced by national borders, and this is especially true when we control for the endogeneity of trade policy to imports, as suggested by political economy arguments. Moreover, our results show that elements linked to cultural proximity and consumer preference for home goods, matter a great deal in explaining the magnitude of border effects. The trade reduction effect induced by these policy-unrelated components are from 1.5 to 3 times larger than that induced by policy barriers. These results have implications for the economic and welfare significance of national borders.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 22
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ageconsearch.umn.edu/record/25467/files/cp061079.pdf (application/pdf)

Related works:
Journal Article: Explaining National Border Effects in the QUAD Food Trade (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae06:25467

DOI: 10.22004/ag.econ.25467

Access Statistics for this paper

More papers in 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().