Sectorial Border Effects in the European Single Market: An Explanation through Industrial Concentration

33 Pages Posted: 14 Nov 2009

See all articles by Gianluca Cafiso

Gianluca Cafiso

University of Catania - Department of Economics and Business

Date Written: November 11, 2009

Abstract

The purpose of this paper is to explain the relation between the Border Effect and industrial concentration. This is achieved by founding this relation on the Home Market Effect and testing the robustness of this foundation through an application to the European Single Market. A sectorial Gravity Equation is estimated using different econometric estimators, in particular we discuss a recently suggested technique for the estimation of log-linear CES models. Overall, our findings suggest a steady relation between the Border Effect and industrial concentration. Besides, the analysis of industrial concentration through a synthetic index provides us with valuable insights into the structure of the European industry.

Keywords: Trade, Border Effect, Industrial Concentration, Home Market Effect, European Single Market

JEL Classification: F1, F12, F15

Suggested Citation

Cafiso, Gianluca, Sectorial Border Effects in the European Single Market: An Explanation through Industrial Concentration (November 11, 2009). ECB Working Paper No. 1116, Available at SSRN: https://ssrn.com/abstract=1502685 or http://dx.doi.org/10.2139/ssrn.1502685

Gianluca Cafiso (Contact Author)

University of Catania - Department of Economics and Business ( email )

Corso Italia 55
Catania, 95129
Italy
+39 095 7537 745 (Phone)

HOME PAGE: http://sites.google.com/site/giancafiso/

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