Path dependent border effects: the case of Poland's reunification (1918-1939)

The paper explores the persistence of former borders in an integrating economic area, the reborn Polish nation state after World War I. It uses a gravity model of trade for the years 1926-1934 in order to assess the impact of former partition borders that Poland inherited from its period of partition between Germany, Russia, and the Habsburg monarchy (1795-1918). The findings point to a persistent but decreasing impact of former borders over time, interrupted during the Great Depression. Compared to recent findings on border effects between Canada and the US or home bias effects across member states of the contemporary European Union or even between US states the Polish domestic market was quite well integrated.