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Intra-national home bias: New evidence from the United States commodity flow survey

Abstract: This paper estimates the US intra-national home bias in trade using Poisson Pseudo-Maximum Likelihood methodology to complement and extend Wolf’s (2000) work. We use Wolf’s data from the 1993 Commodity Flow Survey (CFS) and add the 1997, 2002, 2007, and 2012 waves. We claim that Wolf’s home bias magnitude is overestimated due to the log-linearization of the gravity equation and the control for distance used in the cross-sectional study. Our results with panel data and latest econometric estimators show that the levels of US States home bias are in between 50% and 60% lower than in Wolf’s. However, since 2002 the home bias has experienced substantial growth, which suggests that the US market is less commercially integrated in 2012 than in 1993.

 Authorship: Martínez-San Román V., Mateo-Mantecón I., Sainz-González R.,

 Fuente: Economics Letters, 2017, 151, 4?9

 Publisher: Elsevier

 Year of publication: 2017

 No. of pages: 6

 Publication type: Article

 DOI: 10.1016/j.econlet.2016.11.038

 ISSN: 0165-1765

 Publication Url: https://doi.org/10.1016/j.econlet.2016.11.038