Bilateral Import, Export, and Conflict/Cooperation Simultaneity

Abstract

A mathematical model of dyadic trade and the level of political conflict0 cooperation is developed and empirically tested. The model extends the literature in three ways. First, the bilateral trade quantities and the level of conflict0cooperation are simultaneously determined. Second, the commonly used unitary state actor is replaced by a government, an exporter, and an importer in each country in a dyad. Third, actionreaction conflict0cooperation dynamics are incorporated into the model. The model predicts that the effect of bilateral trade quantity on conflict0 cooperation and the effect of conflict0cooperation on the monetary value of trade may be positive or negative, whereas the effect of conflict on trade quantity will be negative. These predictions depend on certain conditions, heretofore unrecognized in the literature. The empirical test employs statistical methods, and the results generally support the model's predictions. Overall, this paper suggests that contemporary trade and conflict theories may miss important elements, pointing out the need for richer, more microfounded models.

War and Third-party Trade

“…4. See Anderton and Carter (2001); Keshk, Pollins, and Reuveny (2004); Keshk, Reuveny, and Pollins (2010); Kim and Rousseau (2005); Mansfield and Bronson (1997); Oneal, Russett, and Berbaum (2003); Polachek (1980Polachek ( , 1997; Pollins (1989aPollins ( , 1989b; Reuveny (2001); Reuveny and Kang (2003); Russett and Oneal (2001). For different results, see Barbieri and Levy (1999); Blomberg and Hess (2006); Mansfield and Pevehouse (2000); Morrow, Siverson, and Tabares (1998); and Reuveny and Kang (1998).…”

A Simultaneous‐Equations Model of Trade, Conflict, and Cooperation

“…Days without reports are replaced by a neutral event with a weight of zero.We aggregate daily CC events over time by using the widely-used weights from Goldstein (1992) for the WEIS, and from Azar and Havener (1976) for the COPDAB. As in Reuveny andKang (1996a,b, 1998), COPDAB and WEIS are spliced per dyad into a single series from 1948 to 1992. 9 The empirical model follows equations (10) and (15), written for each country in a dyad.…”

“…Other analysts use a continuous measure of CC, where actions range from war and disputes on one side to joining alliances and peace on the other. Reuveny andKang (1996a, 1998) find that the Granger causality between BT and a continuous measure of CC is bidirectional. Their results, and the results of both types of studies above, suggest a need for a simultaneous-equations model (SEM) between BT and CC.…”

The Limits of Economic Globalization

“…For expositions (without attention to Northern and Southern globalization) see Modelski and Thompson (1996) and Thompson (2000). 2 See for example Modelski (1987Modelski ( , 1996, Thompson (1988, 1996), Thompson (1988Thompson ( , 2000, Rasler and Thompson (1994), and Reuveny and Thompson (1999, 2001, 2004b. 3 Examples of these radical innovations include mechanized textile looms, steam engines, electrifi cation, automobiles, jet engines, and computers.…”