Publications

Trade Agreements and Subnational Income of Border Regions (with Mario Larch and David Stadelmann), Economic Inquiry, 61(4), 2023, pp. 1034–1052.
Links: Paper, Online Appendix, Replication Files

Abstract: This paper analyses the differential effect of trade agreements on income per capita of subnational regions with international borders. We construct an extensive panel dataset covering 1350 regions in 86 countries worldwide between 1950 and 2017. Our results show that trade agreements are positively associated with income per capita of regions sharing contiguous borders with trading partners, relative to regions sharing borders with countries with whom no trade agreements exist. For border regions, the positive relationship of trade agreements and regional income roughly compensates potential income disadvantages of having international borders. These insights help in explaining and mitigating regional inequalities.

Spain, Split and Talk: Quantifying Regional Independence (with Mario Larch and Jordi Paniagua), Regional Studies, 59(1), 2025.
Links: Paper, Online Appendix, Policy Outreach: Congress of the Economy and Business of Catalonia, European Centre for International Political Economy

Abstract: We quantify the economic impact of a potential secession of Catalonia from Spain. Using a novel dataset of trade flows between 17 Spanish subnational regions and 142 countries, we estimate the effects of different levels of borders on trade flows and uncover heterogeneity in regional, national and EU border effects. We use a general equilibrium analysis of trade with fiscal transfers to understand the consequences of a potential secession with political uncertainty. In counterfactual experiments, we impose new borders on Catalan regional and international trade, potentially within or outside the European Union, resulting in a welfare decline for Catalonia and Spain.

Working Papers

ANOVA-HDFE: Fast Variance Decomposition with High-Dimensional Fixed Effects and an Application to Trade Flows (with Mario Larch and Michael Nower), CESifo Working Paper No. 12055, 2025.
Link: Working Paper

Abstract: Performing an analysis of variance (ANOVA) on a large dataset spanning many dimensions becomes computationally challenging or even infeasible. We develop a new, fast procedure, ANOVA-HDFE, which uses sequential linear regressions and builds on recent advances in regression analysis with high-dimensional fixed effects (HDFE). It accommodates both balanced and unbalanced settings with many categorical and continuous covariates, while also allowing for high-dimensional fixed effects. Applying ANOVA-HDFE to bilateral trade flows, we find that 60% of the variation is at the country or country-time level. Moreover, a substantial proportion of the pair-specific variation remains unexplained by standard trade cost proxy variables.

Selected Work in Progress

A Structural Regional Trade and Migration Framework for Policy Evaluation: Quantifying the Regional Effects of the 2004 EU Enlargement (with Mario Larch).

Evaluating the Effects of Transport Infrastructure Policy on European Subnational Regions in a Framework with Trade and Commuting.

Spillovers, Trade Agreements and Border Regions: Econometric Evidence from Subnational Data (with Lara Bieske, Mario Larch and David Stadelmann).