Border effects in a free-trade zone: Evidence from European wine shipments

This article examines shipments of wine from European producers to 16 European ports. The research question focuses on disaggregated decisions about which port to use controlling for distance, port fixed effects and whether a national border must be crossed to reach the port. Using a conditional logit model we find heterogeneous impacts of transportation costs and national borders on port choice across shippers of various sizes. Based on the estimation results, we calculate the distance equivalents of national borders for shippers of various sizes. We show that border effects are non-trivial and asymmetric, even within the European free-trade zone.