Subnational Income Growth and International Border Effects

Arbeitspapier

This paper analyses the effect of international borders and of trade agreements at international borders on subnational (i.e. regional) growth. We construct an extensive panel dataset covering 1,350 regions in 86 countries worldwide between 1950 and 2017. Our results show that international borders decrease regional income per capita, while trade agreements at international borders increase regional income per capita by about the same magnitude. The positive marginal effect of trade agreements on regional income corresponds to at least three fifths of the negative marginal effect of international borders. Thus, trade agreements can compensate negative border effects and explain regional inequalities within countries. An array of robustness tests supports our interpretations.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9100

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Trade ; Economic Integration ; Economic Growth of Open Economies ; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure ; Size and Spatial Distributions of Regional Economic Activity
• Subject: border effects ; trade ; trade agreements ; GDP per capita ; regional analysis

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Adam, Hanna L. ; Larch, Mario ; Stadelmann, David
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/236642
• Last update: 10.03.2025, 11:42 AM CET