Border effects refer to asymmetries in trade patterns between cities and regions of different countries that share a national border and those that are located in the same country. Usually, trade volume is much lesser between the former cities and regions.
Economic integration (as in the EU) may be a solution to overcome these effects. A 2017 meta-analysis of 1,271 estimates of the border effect finds that borders reduce trade by one third. 
- ^Border Effects Among EU Countries: Do National Identity and Cultural Differences Matter?
- ^“Do Borders Really Slash Trade? A Meta-Analysislast=” (PDF). doi:10.1057/s41308-016-0001-5
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.