2018
DOI: 10.1111/pirs.12298
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Revisiting the importance of border effect in sub‐national regions. Evidence from a quasi‐experimental design

Abstract: Literature provides significant border effects on consumer prices even for sub‐national regions. Nevertheless, Gorodnichenko and Tesar showed that the evidence from the usual methodology could be illusory if there is cross‐regional heterogeneity in the distribution of within‐region price differentials. We designed a quasi‐experiment that, using a transport fuel dataset, is applied to the Spanish regions. We found that, despite controlling for regional tax divergences, price differences remained critically depe… Show more

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Cited by 9 publications
(8 citation statements)
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“…A summary of the regional tax rates prevailing during the sample period is given in TableB1from Appendix B.13 This implies an approximate travel distance of 4 and 10 kilometers in urban and interurban roads with speed limits of 50 and 120 km/h, respectively. It is quite consistent with the result obtained by the circular approach followed inBalaguer and Ripollés (2018b).…”
supporting
confidence: 92%
“…A summary of the regional tax rates prevailing during the sample period is given in TableB1from Appendix B.13 This implies an approximate travel distance of 4 and 10 kilometers in urban and interurban roads with speed limits of 50 and 120 km/h, respectively. It is quite consistent with the result obtained by the circular approach followed inBalaguer and Ripollés (2018b).…”
supporting
confidence: 92%
“…A summary of the regional tax rates prevailing during the sample period is given inTable B1from Appendix B.13 This implies an approximate travel distance of 4 and 10 kilometers in urban and interurban roads with speed limits of 50 and 120 km/h, respectively. It is quite consistent with the result obtained by the circular approach followed inBalaguer and Ripollés (2018b).…”
supporting
confidence: 92%
“…In general, this generation of research papers has concluded that the sub-national borders are also of great economic significance. The paper byBalaguer and Ripollés (2017) constitutes a remarkable exception in this regard, as it provides some evidence that contrasts with that previously obtained for Spain(Gil-Pareja et al, 2005;Requena and Llano, 2010). Specifically, by employing an empirical approach similar to the one used in this paper (i.e.…”
mentioning
confidence: 82%
“…However, in our paper we reexamine whether internal heterogeneity in distributions is possible.4 It is interesting to note that there is a another generation of literature concerned with knowing whether borders between regions within a same country have any economic relevance (e.g Berkowitz and DeJong, 1999;. Heliwell and Verdier, 2001;Gil-Pareja et al, 2005;Daumal and Zignago, 2010;Requena and Llano, 2010;Persyn and Torfs, 2016;Balaguer and Ripollés, 2017). In general, this generation of research papers has concluded that the sub-national borders are also of great economic significance.…”
mentioning
confidence: 85%