The Role of Social Networks in Enhancing Trade: A Regional Analysis Between Spain and Morocco

This paper examines the impact of social networks on trade, focusing on their role in enhancing economic exchanges and facilitating global value chains. Using, for the first time, a novel database that covers the interregional trade flows (bilateral exports) at the subnational level NUTS 2, between Spain and Morocco, I find that stronger social networks reduce transaction costs, build trust, and create opportunities for cross-border collaboration. This research highlights the significance of social connectivity as a driver of trade and provides valuable insights into the dynamic relationship between social ties and trade at the regional level between Spain and Morocco.