Centrality Bias in Inter-City Trade

Arbeitspapier

Large cities (central places) excessively export to smaller cities in their surrounding hinterland. Using Japanese inter-city trade data, we identify a substantial centrality bias: Shipments from central places to their hinterland are 50%-125% larger than predicted by gravity forces. This upward bias stems from aggregating across industries, which are hierarchically distributed across large and small cities, and therefore does not arise in sectoral gravity estimations. When decomposing the centrality bias along the margins of our data, we find that the by far largest part of this aggregation bias can be attributed to the extensive industry margin.

Object Details

• ISBN: 978-3-96973-179-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 1013

Classification and Topics

• Classification: Wirtschaft ; Index Numbers and Aggregation; Leading indicators ; Trade: General ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Empirical Studies of Trade ; Size and Spatial Distributions of Regional Economic Activity
• Subject: Inter-city trade ; central place theory ; gravity equation ; aggregation bias

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mori, Tomoya ; Wrona, Jens
• Event: Veröffentlichung
• (who): RWI - Leibniz-Institut für Wirtschaftsforschung
• (where): Essen
• (when): 2023

Further information

• DOI: doi:10.4419/96973179
• Handle: http://hdl.handle.net/10419/270958
• Last update: 10.03.2025, 11:43 AM CET