Trade and diplomacy Economic determinants of international cooperation agreements and its effect on international trade in the post World War II era: 1945-2022 - PSE - Paris School of Economics
Pré-Publication, Document De Travail Année : 2024

Trade and diplomacy Economic determinants of international cooperation agreements and its effect on international trade in the post World War II era: 1945-2022

Résumé

We study the determinants of international cooperation and its effect on trade. We rely on a unique database of 31,982 International Cooperation Agreements (ICAs) signed between 1945-2022 by 193 countries. Estimating bilateral gravity equations, we find that trade follows the flag: ICAs increase bilateral exports by around 3-11%. We provide complementary results using firm level exporting data and address potential endogeneity through panel approach and an instrumental variable that exploits the network structure of international relations. Further, using LPM we find that gravity forces explain country pairs entering an ICA, as well as their similarity in UNGA voting and democratic levels. Importantly, we find that ICAs serve as stepping stones towards Regional Trade Agreements, with stronger effects for North-South relations. Our results shed new light on the international relations-trade nexus and contribute to the current debate on friendshoring.>
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Dates et versions

halshs-04721902 , version 1 (04-10-2024)

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  • HAL Id : halshs-04721902 , version 1

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Antoni Estevadeordal, Gaston Nievas. Trade and diplomacy Economic determinants of international cooperation agreements and its effect on international trade in the post World War II era: 1945-2022. 2024. ⟨halshs-04721902⟩
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