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The Global Arms Trade Network 1950-2007

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  • Anna Larsson Seim
  • Anders Akerman

Abstract

Using a large dataset covering all trade in military equipment over the period 1950-2007, we address the relationship between differences in polity and arms trade from a novel empirical perspective. We provide evidence on the determinants of link formation at the bilateral level by estimating gravity specifications and study the evolution of the arms trade network at the global level. Throughout the analysis, we exploit the exogenous shift in preferences implied by the collapse of the Soviet Union in 1991 to discriminate between different hypotheses about the underlying incentives for arms trade. We find a stable negative relationship between differences in polity and the likelihood of arms trade for the duration of the Cold War, but in recent years any negative effects of political differences on the likelihood of arms trade that we find can be entirely accounted for by exporter and importer fixed effects. Our findings thus suggest that democracies have not, on average, discriminated against autocracies when trading arms in the post-Cold War era. The results from the net-work analysis reveal that the network as a whole changes drastically over the sample period in several respects. In addition to comparing the network to other empirical networks, we are able to document important differences between the workings of the NATO and Warsaw Pact sub-networks prior to 1991.

Suggested Citation

  • Anna Larsson Seim & Anders Akerman, 2012. "The Global Arms Trade Network 1950-2007," DEGIT Conference Papers c017_055, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c017_055
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    2. Florian Johannsen & Inmaculada Martínez-Zarzoso, "undated". "Political Determinants of the Extensive and Intensive Margins of International Arms Transfers," Ibero America Institute for Econ. Research (IAI) Discussion Papers 228, Ibero-America Institute for Economic Research.
    3. repec:taf:apeclt:v:24:y:2017:i:1:p:45-48 is not listed on IDEAS
    4. De Benedictis Luca & Nenci Silvia & Santoni Gianluca & Tajoli Lucia & Vicarelli Claudio, 2014. "Network Analysis of World Trade using the BACI-CEPII Dataset," Global Economy Journal, De Gruyter, vol. 14(3-4), pages 1-57, October.
    5. Einar Engvig, 2014. "The T - Rex in the Room: Using Network Analysis to Get a Better Grasp of Small Arms Issues," SADO - Working Papers 208, Small Arms Data Observatory.
    6. Vincenzo Bove & Claudio Deiana & Roberto Nistic�, 2018. "Global Arms Trade and Oil Dependence," Journal of Law, Economics, and Organization, Oxford University Press, vol. 34(2), pages 272-299.
    7. Apergis, Emmanuel & Apergis, Nicholas, 2016. "The 11/13 Paris terrorist attacks and stock prices: The case of the international defense industry," Finance Research Letters, Elsevier, vol. 17(C), pages 186-192.
    8. Nicholas Apergis & Matteo Bonato & Rangan Gupta & Clement Kyei, 2016. "Does Geopolitical Risks Predict Stock Returns and Volatility of Leading Defense Companies? Evidence from a Nonparametric Approach," Working Papers 201671, University of Pretoria, Department of Economics.
    9. König, Michael D. & Tessone, Claudio J. & Zenou, Yves, 2014. "Nestedness in networks: A theoretical model and some applications," Theoretical Economics, Econometric Society, vol. 9(3), September.
    10. repec:oup:erevae:v:44:y:2017:i:4:p:592-633. is not listed on IDEAS
    11. Rossana Mastrandrea & Franco Ruzzenenti & João Amador & Sónia Cabral, 2017. "Who's who in global value chains? A weighted network approach," Working Papers w201707, Banco de Portugal, Economics and Research Department.
    12. Marco Pelliccia, 2015. "Bargaining in Global Communication Networks," Birkbeck Working Papers in Economics and Finance 1507, Birkbeck, Department of Economics, Mathematics & Statistics.

    More about this item

    Keywords

    arms trade; network formation; polity; political regimes;

    JEL classification:

    • F19 - International Economics - - Trade - - - Other
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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