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US Security Strategy and the Gains from Bilateral Trade

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  • Vincenzo Bove
  • Leandro Elia
  • Petros G. Sekeris

Abstract

We explore the geo-strategic determinants of bilateral trade flows between the USA and the rest of the world. We develop a three-party model of security and trade patterns and use data on military assistance and troop deployments over the 1950–2009 period to validate its predictions. We find that security assistance has significant, positive impacts on the shares of bilateral trade between the USA and the recipient country, results that are robust to issues of reverse causality and hold across different sectors.

Suggested Citation

  • Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2014. "US Security Strategy and the Gains from Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 863-885, November.
    • Handle: RePEc:bla:reviec:v:22:y:2014:i:5:p:863-885
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    6. Bove Vincenzo & Elia Leandro & Pelliccia Marco, 2016. "Centrality in Trade Networks and Investment in Security," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(1), pages 27-39, January.
    7. Sasidaran Gopalan & Ramkishen S. Rajan, 2016. "Revisiting Bilateral Foreign Direct Investment Inflows into BRIC Economies," Global Policy, London School of Economics and Political Science, vol. 7(4), pages 510-520, November.
    8. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2021. "Foreign Influence and Domestic Policy," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 426-487, June.
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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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