The Economic Significance of National Border Effects
- (pp. 1291-1312)
Abstract
To address the economic significance of national border effects, this paper provides evidence on two fundamental questions: (1) Do large border effects arise because of high perceived-price wedges between foreign and domestic products, or because imports and domestic goods are very close substitutes?; and (2) If price wedges are important, do they reflect distortionary barriers to trade or do they arise from nondistortionary factors, such as differences in transactions costs or product characteristics? I conclude that, while border effects may imply barriers, welfare costs, and a role for policy, distortions are probably not as substantial as initial border results suggested. (JEL F1)Citation
Evans, Carolyn, L. 2003. "The Economic Significance of National Border Effects." American Economic Review, 93 (4): 1291-1312. DOI: 10.1257/000282803769206304Additional Materials
JEL Classification
- F14 Empirical Studies of Trade
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation