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Civil War in a Globalized World: Diplomacy and Trade

  • Mathieu Couttenier
  • Raphael Soubeyran
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    We consider the impact of diplomatic intervention in civil wars on international trade. Using a large data set over the period 1948-2005, we obtain two striking results: (i) diplomatic intervention has a positive effect on trade for the country in which the civil war occurs (target country); and (ii) bilateral trade between the target and intervening country does not increase more than trade between the target country and the other countries. We argue that intervention induces an enhancement of trade-promoting capital in the target country and show that diplomatic intervention has a positive effect on institutional quality in the target country.

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    File URL: http://www.lameta.univ-montp1.fr/Documents/DR2010-02.pdf
    File Function: First version, 2010
    Download Restriction: no

    Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 10-02.

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    Length: 26 pages
    Date of creation: Feb 2010
    Date of revision: Feb 2010
    Handle: RePEc:lam:wpaper:10-02
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    Web page: http://www.lameta.univ-montp1.fr/

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    1. Berger, Daniel & Easterly, William & Nunn, Nathan & Satyanath, Shanker, 2013. "Commercial Imperialism? Political Influence and Trade during the Cold War," Scholarly Articles 11986334, Harvard University Department of Economics.
    2. Andrei A. Levchenko, 2004. "Institutional Quality and International Trade," IMF Working Papers 04/231, International Monetary Fund.
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    6. James E. Anderson & Douglas Marcouiller, S.J., 1999. "Insecurity and the Pattern of Trade: An Empirical Investigation," Boston College Working Papers in Economics 418, Boston College Department of Economics, revised 03 Aug 2000.
    7. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Civil Wars and International Trade," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00293024, HAL.
    8. Vincent Vicard, 2009. "On trade creation and regional trade agreements: does depth matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(2), pages 167-187, July.
    9. Costinot, Arnaud, 2007. "On the Origins of Comparative Advantage," University of California at San Diego, Economics Working Paper Series qt07g7g8h8, Department of Economics, UC San Diego.
    10. Siyan Chen & Norman V. Loayza & Marta Reynal-Querol, 2008. "The Aftermath of Civil War," World Bank Economic Review, World Bank Group, vol. 22(1), pages 63-85, February.
    11. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    12. William Easterly & Shanker Satyanath & Daniel Berger, 2008. "Superpower Interventions and their Consequences for Democracy: An Empirical Inquiry," NBER Working Papers 13992, National Bureau of Economic Research, Inc.
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