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The weight of economic and commercial diplomacy

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Author Info
Mina Yakop
Peter A.G. van Bergeijk

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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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Paper provided by Institute of Social Studies in its series Working Papers - General Series with number 478.

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Length: 31 p.
Date of creation: 2009
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Handle: RePEc:iss:wpaper:478

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

Find related papers by JEL classification:
F19 - International Economics - - Trade - - - Other
F55 - International Economics - - International Relations and International Political Economy - - - International Institutional Arrangements
F59 - International Economics - - International Relations and International Political Economy - - - Other
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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  1. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April. [Downloadable!] (restricted)
    Other versions:
  2. Volker Nitsch, 2007. "State Visits and International Trade," The World Economy, Blackwell Publishing, vol. 30(12), pages 1797-1816, December. [Downloadable!] (restricted)
    Other versions:
  3. Nitsch, Volker, 2007. "State visits and international trade," Discussion Papers 2007/3, Free University Berlin, School of Business & Economics. [Downloadable!]
  4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March. [Downloadable!]
    Other versions:
  5. 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. [Downloadable!] (restricted)
  6. Bikker, Jacob A, 1987. "An International Trade Flow Model with Substitution: An Extension of the Gravity Model," Kyklos, Blackwell Publishing, vol. 40(3), pages 315-37.
  7. Henri L. F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Blackwell Publishing, vol. 57(1), pages 103-123, 02. [Downloadable!] (restricted)
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  8. 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. [Downloadable!] (restricted)
  9. Andrew K. Rose, 2007. "The Foreign Service and Foreign Trade: Embassies as Export Promotion," The World Economy, Blackwell Publishing, vol. 30(1), pages 22-38, 01. [Downloadable!] (restricted)
    Other versions:
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This page was last updated on 2009-11-8.

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