Working Paper: NBER ID: w9022
Authors: Russell Hillberry; David Hummels
Abstract: Wolf (2000) demonstrates that trade within the U.S. appears substantially impeded by state borders. We revisit this finding with improved data. We show that much intra-national home bias can be explained by wholesaling activity. Shipments by wholesalers are much more localized within states than shipments from manufacturing establishments. Controlling for relative prices and the use of actual, rather than imputed, shipment distances also reduces home bias estimates.
Keywords: No keywords provided
JEL Codes: F15; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| geographic frictions (R12) | trade flows (F10) |
| state borders (F55) | trade flows (F10) |
| wholesaling activity (L81) | intranational home bias (F29) |
| actual shipment distances (L91) | own-state coefficient (C29) |
| wholesale shipments (L81) | own-state coefficient (C29) |
| state borders (F55) | intranational home bias (F29) |