Starting from a theoretically consistent gravity model, this paper first provides estimates of bilateral ‘border effects’ in food trade among Quad countries (Canada, USA, Japan and EU) at the ISIC 4-digit level. Then, it investigates the underlying reasons of border effect, assessing the role played by policy barriers (tariffs and non-tariff barriers) with respect to barriers unrelated to trade policy, such as information related costs and cultural proximity. In contrast with several previous findings, we show that policy barriers are part of the story in explaining the strong trade reduction effect induced by national borders, and this is especially true when we control for the endogenity of trade policy to imports, as suggested by political economy arguments. Moreover, our results show that elements linked to cultural proximity and consumer preference for home goods, matter a great deal in explaining the magnitude of border effects. The trade reduction effect induced by these policy-unrelated components are from 1.5 to 3 times larger than that induced by policy barriers. These results have implications for the economic and welfare significance of national borders.
|Titolo:||Explaining the border effect: the role of policy and non-policy barriers in the Quad food trade|
|Data di pubblicazione:||2006|
|Parole Chiave:||Border effect; Food trade, Market access, Gravity, QUAD countries|
|Settore Scientifico Disciplinare:||Settore AGR/01 - Economia ed Estimo Rurale|
|Enti collegati al convegno:||IATRC|
|Citazione:||Explaining the border effect: the role of policy and non-policy barriers in the Quad food trade / A. Olper, V. Raimondi. ((Intervento presentato al convegno 2006 IATRC Summer Symposium ‘Food Regulation and Trade: Institutional Framework, Concepts of Analysis and Empirical Evidence’ tenutosi a Bonn, Germany nel 2006.|
|Appare nelle tipologie:||14 - Intervento a convegno non pubblicato|