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Empirica

, Volume 37, Issue 4, pp 455–476 | Cite as

The border effects in Spain: an industry-level analysis

  • Francisco RequenaEmail author
  • Carlos Llano
Original Paper

Abstract

A gravity-model approach is used to estimate the magnitude of the internal border (home bias) and external border (frontier) effects in Spain using industry-level trade flows. We find that the average border effects are about 30 and 10, respectively. Next we explore the variation in the industry-specific border effects. First, the border effects are larger in highly product differentiated industries. Second, the internal border effect is twice bigger for trade in intermediate goods than for trade in final goods. Third, conditioning on the geographic concentration of firms reduces significantly the internal border effect.

Keywords

Gravity model Bilateral exports Border effect 

JEL Classification

F14 F17 F21 L14 

Notes

Acknowledgments

F. Requena acknowledges financial support from the Spanish Ministry of Science and Innovation (project number ECO 2008-04059/ECON) and Generalitat Valenciana, project Prometeo/2009/098. C. Llano acknowledges financial support from the Education Department of the Regional Government of Madrid (project TransporTrade S2007/HUM/497).

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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.Dpto de Economía Aplicada II, Facultad de EconomíaUniversidad de ValenciaValenciaSpain
  2. 2.Dpto de Análisis EconómicoUniversidad Autónoma de MadridCantoblanco, MadridSpain

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