Havranek, Tomas; Irsova, Zuzana - William Davidson Institute, University of Michigan - 2015
National borders reduce trade, but most estimates of the border effect seem puzzlingly large. We show that major … methodological innovations of the last decade combine to shrink the border effect to a mere 28% reduction in international trade ows …, measurement of internal and external distance, control for multilateral resistance, and treatment of zero trade flows. We find no …