Huber, Peter; Pfaffermayr, Michael; Wolfmayr, Yvonne - In: DANUBE: Law and Economics Review (2011) 2, pp. 23-41
We estimate a linear approximation of the market potential function for Europe as derived in geography and trade models. Using a spatial econometric estimation approach, border effects are identified by a differential impact of other regions’ purchasing power, depending on whether two regions...