Inter-provincial Trade in Argentina: Financial Flows and Centralism

Pedro Elosegui, Marcos Herrera-Gómez and Jorge Colina ()
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Jorge Colina: Institute for the Argentine Social Development (IDESA)

No 202194, BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department

Abstract: This paper is part of a broader agenda and constitutes a first step to empirically understand the main determinants of the inter-provincial trade in Argentina. We use a novel database of regional trade flows between the 24 Argentinean provinces for 2017. Using a structural gravity model and novel econometric techniques we analyze the main variables influencing trade between the provinces. In addition to the traditional variables of the canonical gravity model we add some variables of interest that ca possible affect trade between sub national jurisdictions. With an especial focus in financial flows we analyze the impact of co-participation transfers, income distribution and household’s payment methods, among other variables that may be correlated with formal trade. Additionally, we analyze the potential impact of trade concentration in the Autonomous City of Buenos Aires (CABA) and Buenos Aires. Trade flows are analyzed considering both, origin and destination. The results indicate that national transfers from the redistribution federal arrangement are an important determinant of inter provincial trade generating relevant (and negative in the origin) spillover effects between the provinces. Also, the concentration in CABA and Buenos Aires discourages inter-provincial trade.

Keywords: gravity model; spatial interactions; redistribution federal arrangement (search for similar items in EconPapers)
JEL-codes: C21 F14 R10 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2021-07
New Economics Papers: this item is included in nep-geo and nep-ure
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Related works:
Journal Article: Inter‐provincial trade in Argentina: Financial flows and centralism (2022)
Working Paper: Inter-Provincial Trade in Argentina: Financial Flows and Centralism (2021)
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