US security strategy and the gains from bilateral trade

Vincenzo Bove, Leandro Elia, Petros Sekeris

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Abstract

We explore the geo-strategic determinants of bilateral trade flows between the U.S. and the rest of the World. We develop a three-party model of security and trade patterns and use data on military assistance and troop deployments on the 1950-2009 period to validate its predictions. We find that security assistance has significant, positive impacts on the shares of bilateral trade between the U.S and the recipient country, results that are robust to issues of reverse causality and hold across different sectors.
Original languageEnglish
Pages (from-to)863-885
JournalReview of International Economics
Volume22
Issue number5
Early online date15 Jul 2014
DOIs
Publication statusPublished - Nov 2014

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