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Border effects and border regions: Lessons from the German unification

Volker Nitsch ()

No 203, HWWA Discussion Papers from Hamburg Institute of International Economics (HWWA)

Abstract: This paper examines data on trade flows between West German Bundesländer (federal states) and East Germany to explore the effect of national borders on trade. Although the data cover only a small fraction of intra-German trade flows, I find a home bias of about factor 2.2; West German shipments to East Germany are about 120% larger than deliveries to an otherwise similar foreign country. Based on this result, possible implications for border regions are discussed

Keywords: home bias; intranational trade; gravity regression; unification (search for similar items in EconPapers)
JEL-codes: F15 F14 (search for similar items in EconPapers)
Date: 2002
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