US security strategy and the gains from bilateral trade

Vincenzo Bove; Leandro Elia; Petros Sekeris

doi:10.1111/roie.12141

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 language	English
Pages (from-to)	863-885
Journal	Review of International Economics
Volume	22
Issue number	5
Early online date	15 Jul 2014
DOIs	https://doi.org/10.1111/roie.12141
Publication status	Published - Nov 2014

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10.1111/roie.12141

SEKERIS_2014_cright_RIE_U.S. Security Strategy and the Gains from Bilateral Trade
This is the accepted version of the following article: U.S. Security Strategy and the Gains from Bilateral Trade, (2014), Review of International Economics, Vol. 40, no. 8, pp863-885 ISSN 0965-7576, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/roie.12141/full
Accepted author manuscript (Post-print), 602 KBLicence: CC BY-NC-SA

http://onlinelibrary.wiley.com/doi/10.1111/roie.12141/full

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AB - 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.

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US security strategy and the gains from bilateral trade

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