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HOW MUCH DOES GEOGRAPHY DEFLECT SERVICES TRADE? CANADIAN ANSWERS
Author(s) -
Anderson James E.,
Milot Catherine A.,
Yotov Yoto V.
Publication year - 2014
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12071
Subject(s) - international trade , trade in services , trade barrier , goods and services , international economics , bilateral trade , international free trade agreement , economic integration , economics , service (business) , border effect , business , geography , economy , archaeology , china
We estimate geographic barriers to trade in nine service categories for Canada's provinces from 1997 to 2007 with novel high‐quality bilateral provincial trade data. The border directly reduces average provincial trade with the United States relative to interprovincial trade to 2.4% of its borderless level. Incorporating multilateral resistance reduces foreign trade relative to interprovincial to 0.1% of its frictionless potential. Geography reduces services trade some seven times more than goods trade overall. Surprisingly, intraprovincial (local) trade in services and goods is equally deflected upward, implying that the border increases interprovincial trade much more in services than goods.