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Tear down this wall: on the persistence of borders in trade

Nitsch, Volker ; Wolf, Nikolaus (2013):
Tear down this wall: on the persistence of borders in trade.
In: Canadian Journal of Economics, 46 (1), pp. 154-179. Blackwell Publishing Inc, [Article]

Abstract

Why do borders still matter for economic activity? The reunification of Germany in 1990 provides a unique natural experiment for examining the effect of political borders on trade. With the fall of the Berlin Wall and the rapid formation of a political and economic union, strong and strictly enforced administrative barriers to trade between East Germany and West Germany were eliminated completely within a very short period of time. Remarkable persistence in intra-German trade patterns along the former East-West border suggests that border effects are neither statistical artefacts nor driven by administrative barriers to trade, but arise from economic fundamentals.

Item Type: Article
Erschienen: 2013
Creators: Nitsch, Volker ; Wolf, Nikolaus
Title: Tear down this wall: on the persistence of borders in trade
Language: English
Abstract:

Why do borders still matter for economic activity? The reunification of Germany in 1990 provides a unique natural experiment for examining the effect of political borders on trade. With the fall of the Berlin Wall and the rapid formation of a political and economic union, strong and strictly enforced administrative barriers to trade between East Germany and West Germany were eliminated completely within a very short period of time. Remarkable persistence in intra-German trade patterns along the former East-West border suggests that border effects are neither statistical artefacts nor driven by administrative barriers to trade, but arise from economic fundamentals.

Journal or Publication Title: Canadian Journal of Economics
Journal volume: 46
Number: 1
Publisher: Blackwell Publishing Inc
Uncontrolled Keywords: F14, F15
Divisions: 01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > International Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics
Date Deposited: 18 Jul 2013 12:22
Official URL: http://dx.doi.org/10.1111/caje.12002
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