IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

U.S. Security Strategy and the Gains from Bilateral Trade

  • Vincenzo Bove


    (Department of Government, University of Essex)

  • Leandro Elia


    (Institute for the Protection and Security of the Citizen, European Commission-Joint Research Centre)

  • Petros G. Sekeris


    (University of Namur)

The relationship between trade and foreign-policy goals has led to growing debates in the field of international economics and international relations. Most studies are cross-national and use interstate disputes to proxy the national security interests. We focus on the U.S., the world’s largest trading nation and a global power. While the U.S. has deployed more forces abroad and in more countries than any other nation in the world history, it is also the largest contributor of military aid to foreign countries. Troops and weapons are expensive tools of foreign policy and can serve to explore the geo-strategic determinants of bilateral trade flows between the U.S. and the rest of the World, in times of peace and armed conflict. We develop a three-party model of security and trade patterns and validate its predictions through an augmented log gravity model and newly constructed data on U.S. troop deployments and bilateral foreign military financing (FMF) on the 1950-2010 period. We find that both tools have significant, positive impacts on the shares of bilateral trade between the U.S and the recipient country, results that are robust to other known causes of trade and endogeneity issues. Moreover, our corrected model specification leads to a stronger relationship between trade and foreign policy goals than in the traditional models.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: First version, 2013
Download Restriction: no

Paper provided by University of Namur, Department of Economics in its series Working Papers with number 1302.

in new window

Length: 38 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:nam:wpaper:1302
Contact details of provider: Postal: Rempart de la Vierge 8, B-5000 Namur
Phone: ++32/(0)81/72.48.53
Fax: ++32/(0)81/72.48.40
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. James E. Anderson & Douglas Marcouiller, 2005. "Anarchy And Autarky: Endogenous Predation As A Barrier To Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 189-213, 02.
  2. Navin A Bapat, 2011. "Transnational Terrorism, US Military Aid, and the Incentive to Misrepresent," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(3), pages 303-318, May.
  3. Daron Acemoglu & Jorn-Steffen Pischke, 2001. "Changes in the wage structure, family income, and children's education," LSE Research Online Documents on Economics 2471, London School of Economics and Political Science, LSE Library.
  4. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Make Trade Not War?," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 865-900.
  5. Scott L. Baier & Jeffrey H. Bergstrand, 2005. "Do free trade agreements actually increase members’ international trade?," FRB Atlanta Working Paper No. 2005-03, Federal Reserve Bank of Atlanta.
  6. Polachek, Solomon & Seiglie, Carlos, 2006. "Trade, Peace and Democracy: An Analysis of Dyadic Dispute," IZA Discussion Papers 2170, Institute for the Study of Labor (IZA).
  7. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2005. "Globalization and Domestic Conflict," CESifo Working Paper Series 1510, CESifo Group Munich.
  8. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  9. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Civil Wars and International Trade," Sciences Po publications info:hdl:2441/10149, Sciences Po.
  10. Keith Head & Thierry Mayer & John Ries, 2008. "The erosion of colonial trade linkages after independence," Working Papers hal-01066116, HAL.
  11. S. Brock Blomberg & Gregory D. Hess, 2004. "How Much Does Violence Tax Trade?," CESifo Working Paper Series 1222, CESifo Group Munich.
  12. G. Jones & T. Kane, 2012. "U.S. Troops and Foreign Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(3), pages 225-249, June.
  13. Jha, Saumitra, 2008. "Trade, Institutions and Religious Tolerance: Evidence from India," Research Papers 2004, Stanford University, Graduate School of Business.
  14. repec:hal:journl:hal-00293024 is not listed on IDEAS
  15. J. Paul Dunne & Ron Smith, 2010. "Military Expenditure And Granger Causality: A Critical Review," Defence and Peace Economics, Taylor & Francis Journals, vol. 21(5-6), pages 427-441.
  16. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, 09.
  17. Anne Boschini & Anders Olofsg�rd, 2007. "Foreign aid: An instrument for fighting communism?," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 622-648.
  18. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
  19. Polachek Solomon W, 2011. "Current Research and Future Directions in Peace Economics: Trade Gone Awry," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-14, January.
  20. Reuven Glick & Alan M. Taylor, 2005. "Collateral Damage: Trade Disruption and the Economic Impact of War," NBER Working Papers 11565, National Bureau of Economic Research, Inc.
  21. Han Dorussen & Hugh Ward, 2010. "Trade networks and the Kantian peace," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(1), pages 29-42, January.
  22. repec:spo:wpecon:info:hdl:2441/10149 is not listed on IDEAS
  23. Christodoulos Stefanadis, 2010. "Appropriation, Property Rights Institutions, and International Trade," American Economic Journal: Economic Policy, American Economic Association, vol. 2(4), pages 148-72, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nam:wpaper:1302. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-H�l�ne Mathieu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.