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US Security Strategy and the Gains from Bilateral Trade
Author(s) -
Bove Vincenzo,
Elia Leandro,
Sekeris Petros G.
Publication year - 2014
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12141
Subject(s) - bilateral trade , rest (music) , causality (physics) , economics , international trade , international economics , political science , medicine , physics , quantum mechanics , china , law , cardiology
We explore the geo‐strategic determinants of bilateral trade flows between the USA 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 over 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 USA and the recipient country, results that are robust to issues of reverse causality and hold across different sectors.