Patterns of Intra- and Inter-State Trade

22 Pages Posted: 19 Jul 2000 Last revised: 5 Oct 2010

See all articles by Holger C. Wolf

Holger C. Wolf

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS)

Date Written: February 1997

Abstract

Recent studies suggest that intranational trade is "excessive' compared to international trade. An intuitive explanation for this home bias is provided by national trade barriers. A dataset of trade between US states, however, reveals that home bias extends to subnational units. The data suggest three additional stylized facts. First, shipment distances are shorter for intermediate than for final goods. Second, states located close to each other tend to have similar production patterns. Third, trade flows are higher among states with similar production patterns. The stylized facts are consistent with a complementary explanation of home bias resulting from a spatial clustering of production driven by natural and created comparative advantage.

Suggested Citation

Wolf, Holger C., Patterns of Intra- and Inter-State Trade (February 1997). NBER Working Paper No. w5939. Available at SSRN: https://ssrn.com/abstract=225720

Holger C. Wolf (Contact Author)

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States
202-687-8079 (Phone)
202-687-8359 (Fax)

HOME PAGE: http://georgetown.edu/faculty/wolfhc/

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