Catalan Home Bias With the Rest of Spain: Does It Still Exist?



Year of publication 2020
Type Article in Proceedings
Conference Proceedings of the International Scientific Conference ECONOMIC AND SOCIAL POLICY.
MU Faculty or unit

Faculty of Economics and Administration

Keywords Catalonia; exports; gravity model; home bias
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Description The current high degree of support for secession in Catalonia raises questions about the viability of an independent Catalan country. Most deal with the impact secession would have on the region’s foreign trade. The aim of this paper is to identify the main determinants of the region's foreign trade and compare them with previous studies that dealt with this topic. The analysis is based on the gravity model approach, using the Poisson model for the period 1995-2017. We determined that the home bias in Catalan exports presented in the previous literature was, to a great degree, a consequence of the omission of important explanatory variables in the model equation. Moreover, those estimates showed a strong tendency to decrease over time. For the last two years of the period under review, the model predicts a border effect equal to zero.
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