Using theory-grounded estimations of trade flow equations, this paper investigates the role that business and social networks play in shaping trade between French regions. The bilateral intensity of networks is quantified using the financial structure and location of French firms and bilateral stocks of migrants. Compared to a situation without networks, migrants are shown to double bilateral trade flows, while networks of firms multiply trade flows by as much as four in some specifications. Finally, taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three.JEL classification: F12, F15
This paper evaluates, in the context of economic geography estimates, the magnitude of the distortions arising from the choice of zoning system, which is also known as the Modifiable Areal Unit Problem (MAUP). We consider three standard economic geography exercises (the analysis of spatial concentration, agglomeration economies, and trade determinants), using various French zoning systems differentiated according to the size and shape of spatial units, which are the two main determinants of the MAUP. While size matters a little, shape does so much less. Both dimensions seem to be of secondary importance compared to specification issues.JEL classification: R12, R23, C10, C43, O18.
We develop a methodology to compute transport costs accurately. Based on the real transport network, our measure encompasses the characteristics of the infrastructure, vehicle and energy used, as well as labor, insurance, tax and general charges borne by transport carriers. Computed for the 341 French employment areas, road transport shipments and the period 1978-1998, this new measure is compared to alternative ones such as great circle distance, real distance or real time. We conclude that these proxies do a very good job in capturing transport costs in cross-section analysis. However, important discrepancies limit the possibility of substituting them to our measure in time series analysis. Moreover, our measure enables one to identify the policies that most impact transport costs. We show that transport technology and market structure are responsible for most of the transport cost decrease. Infrastructure improvements confine to condition the spatial distribution of the gains. Finally, we detail the opportunities our results could present for researchers and regional policy makers.JEL classification: C81, H54, L92, R58
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