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Do Autocratic States Trade Less?

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The paper analyzes whether the political regime of a country influences its involvement in international trade. Firstly, we develop a theoretical model that predicts that autocracies trade less than democracies. Secondly, we test the predictions of the model empirically using a panel of more than 130 countries for the years 1962 to 2000. In contrast to the existing literature, we use data on individual importing and exporting countries, rather than a dyadic set-up. In line with the model, we find that autocracies import substantially less than democ- racies, even after controlling for ocial trade policies. This finding is very stable and does not depend on a particular set-up or estimation technique

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File URL: http://www.kof.ethz.ch/publications/science/pdf/wp_175.pdf
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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 07-175.

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Length: 31 pages
Date of creation: Sep 2007
Handle: RePEc:kof:wpskof:07-175
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