Intra-national Home Bias: Some Explanations
NBER Working Paper No. 9022
Wolf (2000) demonstrates that trade within the U.S. appears substantially impeded by state borders. We revisit this finding with improved data. We show that much intra-national home bias can be explained by wholesaling activity. Shipments by wholesalers are much more localized within states than shipments from manufacturing establishments. Controlling for relative prices and the use of actual, rather than imputed, shipment distances also reduces home bias estimates.
Published: Hillberry, Russell and David Hummels. "Intranational Home Bias: Some Explanations," Review of Economics and Statistics, 2003, v85(4,Nov), 1089-1092.