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The Destinations of State Trade Missions

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  • Andrew J. Cassey

Abstract

From 1997 to 2006, US state governors led more than 500 trade missions to foreign countries. Trade missions are potentially a form of public investment in export promotion. I create a theory of public investment by introducing government to a Melitz (2003)–Chaney (2008) model. Controlling for state and country characteristics, the model accounts for the frequency and destination of trade missions and predicts a positive relationship between missions and exports by destination. By collecting data on trade mission origins and destinations, I estimate this relationship in the data and find that mission destinations are qualitatively consistent with the model. (JEL codes: F13, H76, O24)

Suggested Citation

  • Andrew J. Cassey, 2016. "The Destinations of State Trade Missions," CESifo Economic Studies, CESifo Group, vol. 62(3), pages 547-571.
    • Handle: RePEc:oup:cesifo:v:62:y:2016:i:3:p:547-571.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifv026
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    References listed on IDEAS

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    1. Shon Ferguson & Rikard Forslid, 2019. "Sizing Up the Impact of Embassies on Exports," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 278-297, January.
    2. Andersson, Martin, 2007. "Entry costs and adjustments on the extensive margin - an analysis of how familiarity breeds exports," Working Paper Series in Economics and Institutions of Innovation 81, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    3. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
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    Cited by:

    1. Shon Ferguson & Rikard Forslid, 2019. "Sizing Up the Impact of Embassies on Exports," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 278-297, January.
    2. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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