Border effect: metodi, teorie ed evidenze empiriche

Borders are political boundaries that separate geographic areas such as countries, regions, towns, counties.  They can affect a variety of phenomena like travel, migration, or trade. Specifically, their impact is documented in the literature ever since McCallum, in his seminal article published in 1995 “National Borders Matter: Canada-U.S. Regional Trade Patterns”, has studied the impact of the border of Canada and the United States on the trade between them. McCallum shows the so-called home-bias through the analysis of trade flows between Canadian provinces and between Canadian provinces and U.S. states. The main takeaway from his studies is that countries have the tendency to trade much more within themselves than with other parties. This phenomenon is commonly known in literature as “border effect.” Border effect is one of the main topics of struggle in international economics. Ever since it was first introduced in the literature, researchers had problems with the theoretical formulation of its main feature, the gravity equation. This study presents some theoretical explanations of the gravity equation, in particular the model by Anderson and van Wincoop (2003). Then, since economists so not agree on the correct estimation methods to employ, for the main ones some advantages and disadvantages are presented. The second chapter deals with the measurements of distance and the lack of data in some countries. Finally, the third chapter presents some empirical findings.