CEPII, Recherche et Expertise sur l'economie mondiale
What Separates Us? Sources of Resistance to Globalization

Keith Head
Thierry Mayer

 Highlights :

 Abstract :
With increasing sophistication, economists have been estimating gravity equations for five decades. Robust evidence shows that borders and distance impede trade by much more than tariffs or transport costs can explain. We therefore advocate investigation of other sources of resistance, despite the greater difficult involved in measuring and modeling them. From our selective review of recent findings, a unifying explanation emerges. A legacy of historical isolation and conflict forged a world economy in which neither tastes nor information are homogeneously distributed. Cultural difference and inadequate information manifest themselves most strongly at national borders and over distance.

 Keywords : Globalization | Gravity | Cultural differences

 JEL : F10
CEPII Working Paper
N°2013-26, September 2013

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 Fields of expertise

Trade & Globalization