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Borders within Europe

Marta Santamaria, Jaume Ventura and Ugur Yesilbayraktar
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Marta Santamaria: University of Warwick and CAGE
Jaume Ventura: CREI, Universitat Pompeu Fabra and Barcelona GSE
Ugur Yesilbayraktar: Universitat Pompeu Fabra and Barcelona GSE

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Are country borders still an impediment to trade flows within Europe? Using a microlevel survey with 3 million annual shipments of goods, we construct a matrix of bilateral trade for 269 European regions. Take two similar region pairs, one containing regions in different countries and the other containing regions in the same country. The market share of the origin region in the destination region for the international pair is 17.5 percent that of the intranational pair. Across industries, this estimate ranges from 12.3 to 38.9 percent. For post-1910 borders, this estimate is 28.8 percent. The implication is clear: Europe is far from having a single market.

Keywords: Border effect; European integration; regional trade. JEL Classification: D71; F15; F55; H77; O57 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-geo and nep-int
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