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Vanishing Borders

Ethnicity and Trade Costs at the Origin of the Yugoslav Market

Bibliographic Data

ID24235359
AuthorsDavid Chilosi (0000-0002-2251-0381, King's College London), Stefan Nikolić (0000-0001-8744-922X, Loughborough University)
Year2026
Pages1-39
Publication date2026-10-21
Open AccessYes
TypeARTICLE
VenueThe Journal of Economic History (JOURNAL)
Journal identifiersISSN: 0022-0507 • E-ISSN: 1471-6372
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s0022050726101466
OpenAlexW7223149063
LanguageEN
References cited64

This article uses the creation of a paradigmatic multi-ethnic state, Yugoslavia, in 1918, and a novel large dataset of grain prices to examine the effect of ethnicity on trade costs when borders changed. Controlling for transport costs and import tariffs, we find a large but transitory border effect. Ethno-religious differences initially significantly increased price gaps, but their negative influence vanished over time as well. The decline was virtually complete about 16 years before unification and involved city-pairs divided by the border, supporting the hypothesis that Yugoslav unification nationalism fostered trust across ethno-religious networks of international traders.

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