Premium
Border effects and the availability of domestic products abroad
Author(s) -
Evans Carolyn L.
Publication year - 2006
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.0008-4085.2006.00345.x
Subject(s) - margin (machine learning) , relevance (law) , international trade , border effect , international economics , trade volume , economics , product (mathematics) , production (economics) , business , microeconomics , mathematics , geometry , machine learning , computer science , political science , law
. Trade between countries could fall short of trade within a country because (1) the volume of international trade is less than the volume of domestic trade for a given product (the intensive margin); or (2) some goods that are sold domestically are simply not exported (the extensive margin). My theoretical model illustrates that either of these two factors could explain a given aggregate ‘border effect.’ I examine the empirical relevance of this distinction by isolating the fraction of total domestic production attributable only to exporters, finding that around one‐half of the border effect may be attributed to each explanation. JEL classification: F1