War and trade in the peaceful century: the impact of interstate wars on bilateral trade flows during the first wave of globalization, 1830–1913

This article examines the impact of war on trade between 1830 and 1913, that is, during the so‐called first wave of globalization. It has been argued that one of the main reasons for the rapid integration of commodity and factor markets that took place during this period was the peaceful character of the post‐Napoleonic nineteenth century. However, little research has been conducted on the actual impact of wars on international trade during this period. Previous research on the link between war and trade in general has found that war reduces trade both between belligerents and between belligerents and third parties (or neutrals). Apart from a handful of country case studies, this research has focused almost exclusively on the period before or after the peaceful nineteenth century. Our results show that, in the nineteenth century, the negative influence of war on trade was mainly limited to the belligerent economies, while belligerent–neutral trade was either unaffected or even increased during times of war. Also, in contrast to the findings of research on twentieth‐century wars, we find that nineteenth‐century wars had a strictly contemporaneous impact on trade, with a return to normalcy ensuing shortly after the cessation of hostilities.