Intra-National Home Bias: Some Explanations
Russell H. Hillberry
University of Melbourne - Department of Economics; World Bank - Development Research Group (DECRG)
David L. Hummels
Purdue University - Department of Economics; National Bureau of Economic Research (NBER)
NBER Working Paper No. w9022
Wolf (2000) demonstrates that trade within the U.S. appears substantially impeded by state borders. We revisit this finding with improved data. We show that much intra-national home bias can be explained by wholesaling activity. Shipments by wholesalers are much more localized within states than shipments from manufacturing establishments. Controlling for relative prices and the use of actual, rather than imputed, shipment distances also reduces home bias estimates.
Number of Pages in PDF File: 12
Date posted: June 21, 2002
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