US security strategy and the gains from bilateral trade

Vincenzo Bove, Leandro Elia, Petros Sekeris

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    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
    Issue number5
    Early online date15 Jul 2014
    Publication statusPublished - Nov 2014


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