National Borders and International Trade: Evidence from the European Union
Author(s)
Nitsch, Volcker
Abstract
In this paper the impact of national borders on international trade within the European Union (EU) is considered. Using a gravity model, the author find that, averaged over all EU countries, intra-national trade is about ten times as high as international trade with an EU partner country of similar size and distance. This relatively strong home bias suggests that even within the European Union national borders still have a decisive impact on trade patterns.
