A trade hierarchy of cities based on transport cost thresholds
Empirical evidence has been lacking to explain trade agglomerations over short distances. Starting with a novel micro-database of road freight shipments within Spain for the period 2003-2007, this paper breaks down city (municipal) trade flows into the extensive and intensive margins and assess trade frictions and trade concentration relying on a unique generalized transport cost measure and three internal borders, NUTS-5 (municipal), NUTS-3 (provincial) and NUTS-2 (regional).
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