Advanced Search
MyIDEAS: Login

U.S. Security Strategy and the Gains from Bilateral Trade

Contents:

Author Info

  • Vincenzo Bove

    () (Department of Government, University of Essex)

  • Leandro Elia

    () (Institute for the Protection and Security of the Citizen, European Commission-Joint Research Centre)

  • Petros G. Sekeris

    () (University of Namur)

Abstract

The relationship between trade and foreign-policy goals has led to growing debates in the field of international economics and international relations. Most studies are cross-national and use interstate disputes to proxy the national security interests. We focus on the U.S., the world’s largest trading nation and a global power. While the U.S. has deployed more forces abroad and in more countries than any other nation in the world history, it is also the largest contributor of military aid to foreign countries. Troops and weapons are expensive tools of foreign policy and can serve to explore the geo-strategic determinants of bilateral trade flows between the U.S. and the rest of the World, in times of peace and armed conflict. We develop a three-party model of security and trade patterns and validate its predictions through an augmented log gravity model and newly constructed data on U.S. troop deployments and bilateral foreign military financing (FMF) on the 1950-2010 period. We find that both tools have significant, positive impacts on the shares of bilateral trade between the U.S and the recipient country, results that are robust to other known causes of trade and endogeneity issues. Moreover, our corrected model specification leads to a stronger relationship between trade and foreign policy goals than in the traditional models.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.fundp.ac.be/eco/economie/recherche/wpseries/wp/1302.pdf
File Function: First version, 2013
Download Restriction: no

Bibliographic Info

Paper provided by University of Namur, Department of Economics in its series Working Papers with number 1302.

as in new window
Length: 38 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:nam:wpaper:1302

Contact details of provider:
Postal: Rempart de la Vierge 8, B-5000 Namur
Phone: ++32/(0)81/72.48.53
Fax: ++32/(0)81/72.48.40
Web page: http://www.fundp.ac.be/en/eco
More information through EDIRC

Related research

Keywords: Trade and war; military aid;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2005. "Globalization and Domestic Conflict," CESifo Working Paper Series 1510, CESifo Group Munich.
  2. Glick, Reuven & Taylor, Alan M, 2005. "Collateral Damage: Trade Disruption and the Economic Impact of War," CEPR Discussion Papers 5209, C.E.P.R. Discussion Papers.
  3. S. Brock Blomberg & Gregory D. Hess, 2006. "How Much Does Violence Tax Trade?," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 599-612, November.
  4. repec:hal:journl:hal-00293024 is not listed on IDEAS
  5. 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.
  6. Acemoglu, Daron & Pischke, Jorn-Steffen, 2001. "Changes in the wage structure, family income, and children's education," Open Access publications from London School of Economics and Political Science http://eprints.lse.ac.uk/, London School of Economics and Political Science.
  7. James E. Anderson & Douglas Marcouiller, 2005. "Anarchy And Autarky: Endogenous Predation As A Barrier To Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 189-213, 02.
  8. Thoenig, Mathias & Martin, Philippe & Mayer, Thierry, 2008. "Civil Wars and International Trade," Open Access publications from Sciences Po info:hdl:2441/10149, Sciences Po.
  9. repec:sae:joupea:v:48:y:2011:i:3:p:303-318 is not listed on IDEAS
  10. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
  11. Thierry Mayer & Keith Head & John Ries, 2008. "The Erosion of Colonial Trade Linkages after Independence," Working Papers 2008-27, CEPII research center.
  12. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Make Trade Not War?," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 865-900.
  13. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Make Trade Not War?," Review of Economic Studies, Wiley Blackwell, vol. 75(3), pages 865-900, 07.
  14. Christodoulos Stefanadis, 2010. "Appropriation, Property Rights Institutions, and International Trade," American Economic Journal: Economic Policy, American Economic Association, vol. 2(4), pages 148-72, November.
  15. Solomon W. Polachek, 2011. "Current Research and Future Directions in Peace Economics: Trade Gone Awry," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 4.
  16. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, 09.
  17. Polachek, Solomon W. & Seiglie, Carlos, 2007. "Trade, Peace and Democracy: An Analysis of Dyadic Dispute," Handbook of Defense Economics, Elsevier.
  18. repec:sae:joupea:v:47:y:2010:i:1:p:29-42 is not listed on IDEAS
  19. Scott L. Baier & Jeffrey H. Bergstrand, 2005. "Do free trade agreements actually increase members’ international trade?," Working Paper 2005-03, Federal Reserve Bank of Atlanta.
  20. Anne Boschini & Anders Olofsg�rd, 2007. "Foreign aid: An instrument for fighting communism?," The Journal of Development Studies, Taylor and Francis Journals, vol. 43(4), pages 622-648.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nam:wpaper:1302

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-H�l�ne Mathieu).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.