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The weight of economic and commercial diplomacy

  • Yakop, M.
  • van Bergeijk, P.A.G.

This paper investigates the impact of economic and commercial diplomacy on the geography of international trade. We replicate a recent study by Rose (2007) extending the analysis to include the year 2006 and 63 importing and exporting countries. Using a gravity model we are able to demonstrate that diplomatic representation via embassies and consulates is not a relevant trade enhancing factor for trade within the OECD. In contrast diplomatic representation is significant in bilateral trade relationships of developing countries as it both facilitates imports and stimulates exports. We discuss some implications of our findings for developing countries especially in view of South--South trade.

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Paper provided by International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague in its series ISS Working Papers - General Series with number 18715.

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Date of creation: 01 Aug 2009
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Handle: RePEc:ems:euriss:18715
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  1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Cultural Biases in Economic Exchange?," Economics Working Papers ECO2007/42, European University Institute.
  2. Henri L.F. De Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," ERSA conference papers ersa03p421, European Regional Science Association.
  3. Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 430-447, May.
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  5. Nitsch, Volker, 2007. "State visits and international trade," Discussion Papers 2007/3, Free University Berlin, School of Business & Economics.
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  7. van Marrewijk, Charles & van Bergeijk, Peter A. G., 1993. "Endogenous trade uncertainty : Why countries may specialize against comparative advantage," Regional Science and Urban Economics, Elsevier, vol. 23(5), pages 681-694, November.
  8. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  9. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
  10. Sebastian Krautheim, 2007. "Gravity and Information: Heterogeneous Firms, Exporter Networks and the 'Distance Puzzle'," Economics Working Papers ECO2007/51, European University Institute.
  11. Jesus Felipe & Matias Vernengo, 2002. "Demystifying the Principles of Comparative Advantage : Implications for Developing Countries," International Journal of Political Economy, M.E. Sharpe, Inc., vol. 32(4), pages 49-75, January.
  12. Summary, Rebecca M, 1989. "A Political-Economic Model of U.S. Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 179-82, February.
  13. Rubén Segura-Cayuela & Josep M. Vilarrubia, 2008. "The effect of foreign service on trade volumes and trade partners," Banco de Espa�a Working Papers 0808, Banco de Espa�a.
  14. Frank A.G. den Butter & Robert H.J. Mosch, 2003. "Trade, Trust and Transaction Cost," Tinbergen Institute Discussion Papers 03-082/3, Tinbergen Institute.
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