Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247144 
Year of Publication: 
2021
Series/Report no.: 
EHES Working Paper No. 214
Publisher: 
European Historical Economics Society (EHES), s.l.
Abstract: 
This article exploits the creation of a paradigmatic multi-ethnic state, Yugoslavia, to examine if, to what extent, and why the effect of ethnic ties on trade costs changes over time. We compile and examine a panel of over 550,000 inter-urban price gaps spanning the area of Yugoslavia in the decades before and after the Yugoslav unification of 1918. Controlling for observable trade costs, we find that crossing the border between Serbia and Austria-Hungary significantly increased price gaps before the First World War. Ethno-religious differences explained a large share of this border effect in pre-unification Yugoslavia, but their influence vanished over time. This decline began about twelve years before the unification, and is visible both in city-pairs that were separated by the pre-war border and in those that were not. These patterns suggest that nation-building, rather than a weakening incentive to rely on private order institutions, was the main unifying factor.
Subjects: 
border effect
ethnicity
market integration
nation-building
trade costs
JEL: 
F14
F15
F52
N7
N9
Z12
Z13
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.