| Abstract: | New Borders: Evidence from the Former Soviet Union. — We study the effects of trade barriers and the persistence of past linkages
on trade flows in the former Soviet Union (FSU). Estimating a gravity equation on 1987–1996 trade between nine Russian regions
and fourteen FSU republics, we find that Russian regions traded nearly twice as much with each other as with republics in
the reform period (1994–1996). In contrast, they did not trade significantly more with each other than with republics in the
prereform period (1987–1990). Our results suggest that the bias towards domestic trade in the reform period is primarily a
result of tariffs. We also find that past linkages, such as infrastructure, production and consumption chains, and business
networks, have limited the reorientation of trade. |
