NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Borders, Ethnicity and Trade

Jenny C. Aker, Michael W. Klein, Stephen A. O'Connell, Muzhe Yang

NBER Working Paper No. 15960
Issued in May 2010
NBER Program(s):   IFM

Do national borders and ethnicity contribute to market segmentation between and within countries? This paper uses unique and high-frequency data on narrowly-defined goods to gauge the extent to which a national border impedes trade between developing countries (Niger and Nigeria). Using a regression discontinuity approach, we find a significant price change at the national border, but one that is lower in magnitude than that found for industrialized countries. Yet unlike that literature, and in line with important characteristics of African economies, we investigate the role of ethnicity in mitigating and exacerbating the border effect. We find that a common ethnicity is linked to lower price dispersion across countries, yet ethnic diversity creates an internal border within Niger. The primary mechanism behind the internal border effect appears to be related to the role of ethnicity in facilitating access to credit in rural markets.

download in pdf format
   (370 K)

email paper

This paper is available as PDF (370 K) or via email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15960

Users who downloaded this paper also downloaded these:
Klein, Moser, and Urban w15985 The Contribution of Trade to Wage Inequality: The Role of Skill, Gender, and Nationality
Ferreira and Waldfogel w15964 Pop Internationalism: Has A Half Century of World Music Trade Displaced Local Culture?
Easterly and Reshef w16597 African Export Successes: Surprises, Stylized Facts, and Explanations
Acemoglu, Gancia, and Zilibotti w15958 Competing Engines of Growth: Innovation and Standardization
Bebchuk, Cohen, and Wang w15912 Learning and the Disappearing Association Between Governance and Returns
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us