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The weight of economic and commercial diplomacy

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  • Yakop, M.
  • van Bergeijk, P.A.G.

Abstract

This paper investigates the impact of economic and commercial diplomacy on the geography of international trade. We replicate a recent study by Rose (2007) extending the analysis to include the year 2006 and 63 importing and exporting countries. Using a gravity model we are able to demonstrate that diplomatic representation via embassies and consulates is not a relevant trade enhancing factor for trade within the OECD. In contrast diplomatic representation is significant in bilateral trade relationships of developing countries as it both facilitates imports and stimulates exports. We discuss some implications of our findings for developing countries especially in view of South–South trade.

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Bibliographic Info

Paper provided by International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague in its series ISS Working Papers - General Series with number 18715.

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Date of creation: 01 Aug 2009
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Handle: RePEc:ems:euriss:18715

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Related research

Keywords: development; diplomacy; gravity model; south–south trade;

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References

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  1. Volker Nitsch, 2007. "State Visits and International Trade," The World Economy, Wiley Blackwell, vol. 30(12), pages 1797-1816, December.
  2. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1095-1131, August.
  3. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  4. Frank A.G. den Butter & Robert H.J. Mosch, 2003. "Trade, Trust and Transaction Cost," Tinbergen Institute Discussion Papers 03-082/3, Tinbergen Institute.
  5. Summary, Rebecca M, 1989. "A Political-Economic Model of U.S. Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 179-82, February.
  6. Henri L.F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," Tinbergen Institute Discussion Papers 03-044/3, Tinbergen Institute, revised 30 Oct 2003.
  7. Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 430-447, May.
  8. Simon J. Evenett & Wolfgang Keller, 1996. "On Theories Explaining the Success of the Gravity Equation," International Trade 9608001, EconWPA, revised 13 Jun 1997.
  9. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
  10. van Marrewijk, Charles & van Bergeijk, Peter A. G., 1993. "Endogenous trade uncertainty : Why countries may specialize against comparative advantage," Regional Science and Urban Economics, Elsevier, vol. 23(5), pages 681-694, November.
  11. Rubén Segura-Cayuela & Josep M. Vilarrubia, 2008. "The effect of foreign service on trade volumes and trade partners," Banco de Espa�a Working Papers 0808, Banco de Espa�a.
  12. Sebastian Krautheim, 2007. "Gravity and Information: Heterogeneous Firms, Exporter Networks and the 'Distance Puzzle'," Economics Working Papers ECO2007/51, European University Institute.
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Cited by:
  1. Gorazd Justinek & Tanja Sedej, 2012. "Measuring export support performance in Slovenia," International Journal of Diplomacy and Economy, Inderscience Enterprises Ltd, vol. 1(1), pages 80-94.
  2. Huub Ruel & Robin Visser, 2012. "Commercial diplomats as corporate entrepreneurs: explaining role behaviour from an institutional perspective," International Journal of Diplomacy and Economy, Inderscience Enterprises Ltd, vol. 1(1), pages 42-79.

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