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Federalism, separatism and international trade

Daumal, Marie (2008), Federalism, separatism and international trade, European Journal of Political Economy, 24, 3, p. 675-687. http://dx.doi.org/10.1016/j.ejpoleco.2008.06.007

Type
Article accepté pour publication ou publié
Date
2008-09
Journal name
European Journal of Political Economy
Volume
24
Number
3
Publisher
Elsevier
Pages
675-687
Publication identifier
http://dx.doi.org/10.1016/j.ejpoleco.2008.06.007
Metadata
Show full item record
Author(s)
Daumal, Marie
Abstract (EN)
This paper explores whether countries that have a federal Constitution engage in more international trade. We identify two possible mechanisms through which political fragmentation of nation-states, namely federalism, might impact positively on trade globalization processes: domestic market fragmentation and the free trade strategy pursued by certain separatist regions in federal countries. We use a gravity equation running panel regressions to estimate the impact of federalism on trade. The Poisson estimator proposed by Santos Silva and Tenreyro (2006) is used to handle the null trade flows. We test our predictions on a large data set of 148 countries on the 1980–2002 period. After controlling for determinants of trade potentially correlated with federalism, a federalist system is found to increase international trade. We also find that separatism and linguistic fractionalization impact positively on trade openness.
Subjects / Keywords
International trade; Federalism; Separatism; Gravity model
JEL
H77 - Intergovernmental Relations; Federalism; Secession
F15 - Economic Integration

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