Discussion Paper
No. 2015-69 |
December 17, 2015
Distance and Border Effects in International Trade: A Comparison of Estimation Methods
(Published in Distance and Border Effects in Economics)
Abstract
This paper compares various estimation techniques used to determine the impact of distance and borders on international trade. The results consistently confirm the significantly negative distance effect, while the border effect, measured by evaluating whether intra-continental trade exceeds inter-continental trade, appears to be ambiguous and dependent on the estimation method. In addition, also the size of both effects varies substantially across estimation methods. Finally, the authors generally find that the estimations are in line with the respective weighting schemes of each estimation method.
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