Merchant hubs and spatial disparities in the private enforcement of international trade regimes

Abstract

Private enforcement through courts has been put forward as a possible substitute to public enforcement of federal and international trade regimes. In this article, we seek to advance the empirical literature on private enforcement in the EU context by overcoming the limitations of existing datasets. We present a new dataset measuring referral activity at subnational level and argue that EU trademark registrations represent a better proxy for cross-border economic activity than intra-EU trade in goods. EU trademark registrations capture trade in services as well as goods and are measured at the regional rather than at the national level. Consistent with theories emphasising the link between economic and legal integration, we find that regions with higher concentrations of EU trademark users generate significantly more referrals. Our analysis suggests that private enforcement is more effective in regions with large trade hubs and less so in more peripheral regions with less trade-oriented economies.