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The Foreign Service and Foreign Trade: Embassies as Export Promotion

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  • Andrew K. Rose

Abstract

As communication costs fall, foreign embassies and consulates have lost much of their role in decision-making and information-gathering. Accordingly, foreign services are increasingly marketing themselves as agents of export promotion. I investigate whether exports are in fact systematically associated with diplomatic representation abroad. I use a recent cross-section of data covering 22 large exporters and 200 import destinations. Bilateral exports rise by approximately six to ten per cent for each additional consulate abroad, controlling for a host of other features including reverse causality. The effect varies by exporter, and is non-linear; consulates have smaller effects than the creation of an embassy. Copyright 2007 Blackwell Publishers Ltd (a Blackwell Publishing Company).

Suggested Citation

  • Andrew K. Rose, 2007. "The Foreign Service and Foreign Trade: Embassies as Export Promotion," The World Economy, Wiley Blackwell, vol. 30(1), pages 22-38, January.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:1:p:22-38
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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