Department of Economics and Business - Universitat Pompeu Fabra

Title:: Borders within Europe
Authors:: Marta Santamaría, Jaume Ventura and Uğur Yeşilbayraktar
Date:: December 2020 (Revised: February 2024)
Abstract:: Are country borders still an impediment to trade flows within Europe? Using a microlevel survey with 3 million annual shipments of goods, we construct a matrix of bilateral trade for 269 European regions. Take two similar region pairs, one containing regions in different countries and the other containing regions in the same country. The market share of the origin region in the destination region for the international pair is 17.5 percent that of the intranational pair. Across industries, this estimate ranges from 12.3 to 38.9 percent. For post-1910 borders, this estimate is 28.8 percent. The implication is clear: Europe is far from having a single market.
Keywords:: Border effect, European integration, regional trade
JEL codes:: D71, F15, F55, H77, O57
Area of Research:: Macroeconomics and International Economics

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