Revisiting Border Effects to Trade Across Canadian Provinces from the Internal Trade-Migration Nexus
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In this paper, I study how interprovincial migration impacts interprovincial trade in the wake of several provincial agreements and re-examine the extent and pattern of interprovincial trade barriers in Canada. For estimation, I use a migration augmented gravity model of trade and panel data on interprovincial trade and migration flows during 2000-2016. I find that while most agreements increased trade in goods and services respectively, albeit to different extents, between member provinces, others did not. I also find that the interprovincial barriers to trade are remarkably smaller than have been previously estimated and that the barriers are larger for trade in services than goods. However, over the last two decades in Canada trade barriers have decreased by 17 percent for services but increased by 52 percent for goods flows across provinces.
Abstract
In this paper, I study how interprovincial migration impacts interprovincial trade in the wake of several provincial agreements and re-examine the extent and pattern of interprovincial trade barriers in Canada. For estimation, I use a migration augmented gravity model of trade and panel data on interprovincial trade and migration flows during 2000-2016. I find that while most agreements increased trade in goods and services respectively, albeit to different extents, between member provinces, others did not. I also find that the interprovincial barriers to trade are remarkably smaller than have been previously estimated and that the barriers are larger for trade in services than goods. However, over the last two decades in Canada trade barriers have decreased by 17 percent for services but increased by 52 percent for goods flows across provinces.
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