Border effect
From Wikipedia, the free encyclopedia
Border effects refer to asymmetries in trade patterns between cities and regions of different countries and those that are located in the same country. Usually, trade volume between the former is much less.[1] Economic integration (as in the EU) may be a solution to overcome these effects. A 2017 meta-analysis of 1,271 estimates of the border effect finds that borders reduce trade by one third.[2]
More generally, "border effect" also refers to the tendency of people to purchase consumer goods in a locality that borders another jurisdiction where the desired good is either illegal or highly expensive. Several examples of this are detailed below.
