National borders important to international trade in the province of Misiones?

Abstract

In international trade, because «internal bias», countries tend to trade more within their borders than outside them. Likewise, there are factors that positively affect bilateral trade, such as with countries that share a language, adjacency or trade agreement. In this sense, these factors could contribute to reducing the border effect. This study addresses the problem of the border effect of Misiones, an Argentine province that has 90 % international borders (shared with Paraguay and Brazil). For the analysis, quasi-experimental quantitative approach was used with secondary data source and application of the theory of the gravitational model and econometric technique of the iterative version of the Zellner's Seemingly Unrelated Regressions (SUR) Model for the period 2007-2013. The results show that national borders are important for the Province of Misiones. However, regional belonging produces greater trade with those countries that share a language, land border, and economic agreement (The Mercosur).