Working Paper: NBER ID: w31037
Authors: Marta A. Santamaría; Jaume Ventura; Uur Yeilbayraktar
Abstract: We use the new dataset of trade flows across 269 European regions in 24 countries constructed in Santamaría et al. (2020) to systematically explore for the first time trade patterns within and across country borders. We focus on the differences between home trade, country trade and foreign trade. We document the following facts: (i) European regional trade has a strong home and country bias, (ii) geographic distance and national borders are important determinants of regional trade, but cannot explain the strong regional home bias and (iii) the home bias is heterogeneous across regions and seems to be driven by political regional borders.
Keywords: No keywords provided
JEL Codes: F0; F14; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Political borders (F55) | home bias in trade (F14) |
| Political borders (F55) | significant home bias (G41) |
| Home bias is heterogeneous across regions (R12) | political borders (F55) |
| Geographic distance and national borders (R12) | trade patterns (F10) |
| Home bias in trade (F14) | trade categories (F19) |