The Border Effect in Spain

Salvador Gil-Pareja, Rafael Llorca-Vivero, José A. Martínez-Serrano and Josep Oliver-Alonso

No 2004-28, Working Papers from FEDEA

Abstract: This paper analyses the border effect in Spain over the period 1995-98 using a data set on intranational trade that is unique in Europe. The results indicate that, after controlling for market size and distance, Spanish regions trade around 21 times more with the rest of Spain than they do with OECD countries. Moreover, the size of the Spanish bias is lower in the case of the Spanish regions’ exports than in the case of imports. Finally, the border effect is not uniform across Spanish regions.

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