Working Paper: NBER ID: w17630
Authors: James E. Anderson; Catherine A. Milot; Yoto V. Yotov
Abstract: We estimate geographic barriers to export trade in nine service categories for Canada's provinces from 1997 to 2007 using the structural gravity model. Constructed Home, Domestic and Foreign Bias indexes (the last two new) capture the direct plus indirect effect of services trade costs on intra-provincial, inter-provincial and international trade relative to their frictionless benchmarks. Barriers to services international trade are huge relative to inter-provincial trade and large relative to goods international trade. A novel test confirms the fit of structural gravity with services trade data.
Keywords: services trade; geographic barriers; Canada; structural gravity model
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| geographic barriers (R12) | services trade (L84) |
| constructed foreign bias (cfb) (G41) | services trade (L84) |
| constructed domestic bias (cdb) (D91) | services trade (L84) |
| ratio of cfb to cdb (C46) | foreign trade costs (F10) |
| border effects (F55) | services trade (L84) |