Inter-province Border Effects,Regional Market Segmentation,and Local Protection—Evidence from Freight Flows in China
Using a trade gravity model based on an intercity freight flow dataset during 2018-2020,we attempt to estimate the inter provincial border effects and examine potential mechanisms of domestic re-gional market segmentations in China.We find a significant inter-province border effect in intercity trade conditional on the basic variables of a gravity model,and the magnitude of this effect is rising in the sam-ple period.Mechanism analysis reveals that the border effect correlates with government development strategy,the level of economic development,and the centrality in the countrywide interregional trade net-work.
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