Contrary to what trade liberalisation may suggest, national borders still matter. Even for similar size and distance, regions trade less when separated by a border. An assessment of border effects, with respect to a given trade norm derived from a gravity model, makes it possible to measure the degree of integration or fragmentation of a geographic zone, or even measure the discrimination which may exist between different supply sources. How are strong border effects between integrated regions to be explained? Exchange volatility is part of the answer. Consumer preferences and the existence of social or business networks which are especially dense within borders also explain this phenomenon. Nevertheless, long term data indicate that border effects are declining, a trend which new information technologies may accelerate.
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