Globalization and the Border Effect: A Geo-Economic Gravity Model of Trade Between the Maghreb and the European Union

Souibgui, Moez and Ben Zina, Naceur (2025): Globalization and the Border Effect: A Geo-Economic Gravity Model of Trade Between the Maghreb and the European Union.

Abstract

This paper examines the theoretical foundations and methodological challenges of assessing border effects in international trade. The border effect serves as an empirical tool to evaluate economic integration by analyzing trade flows and internal exchanges within a region or country. Using gravity models, which effectively capture the impact of economic size, distance, and trade agreements on bilateral trade, this study investigates the trade relationship between the Union of the Maghreb (UMA) and the European Union (EU) from 1995 to 2016. The findings indicate a significant border effect, with intra-Maghreb trade being 3.68 times higher than trade between the UMA and the EU, despite preferential agreements with Europe. Globalization has transformed the role of borders, yet they remain crucial in shaping trade and economic policies. While the Maghreb belongs to multiple regional organizations, its economic integration remains limited, reinforcing dependence on the EU. Additionally, security concerns, including migration and counterterrorism, increasingly influence trade relations. The study concludes that globalization does not eliminate borders but redefines them. Despite increased connectivity and trade liberalization, economic, political, and security factors continue to shape international trade dynamics, highlighting the enduring significance of borders in global economic relations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Border effects, gravity model, international trade, globalization, trade flows
• Subjects: A - General Economics and Teaching > A1 - General Economics > A11 - Role of Economics ; Role of Economists ; Market for Economists; E - Macroeconomics and Monetary Economics > E0 - General

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