Conflict, Cooperation, and Commerce: The Effect of International Political Interactions on Bilateral Trade Flows

Pollins, Brian M.

doi:10.2307/2111070

Cited by 264 publications

(209 citation statements)

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“…This scale gives a score between 0 and +10 (respectively 0 and -10) to each category of event according to the amount of cooperation (con ict) embodied in each event case. Both ows of cooperation and con ict are then combined into a single net indicator of the quality of interstate political relations (QIR) following the transformation proposed by Pollins (1989)…”

Section: The Quality Of Interstate Political Relationsmentioning

confidence: 99%

Foreign direct investment and bilateral investment treaties: An international political perspective

Desbordes

Vicard

2009

Journal of Comparative Economics

126

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Most of the literature dealing with the location of foreign direct investment (FDI) has ignored the fact that multinational enterprises (MNE) are not stateless and that their activities take place within an international political system: the return on their FDI can be greatly in uenced by the quality of interstate political relations between their home and host countries. This paper investigates whether the quality of interstate political relations between countries in uences the volume of bilateral FDI. Thanks to the construction of a new indicator of the quality of interstate political relations, it is found that better interstate political relations foster bilateral FDI, though the signature of a bilateral investment treaty (BIT) may dampen the impact of their uctuations. In addition, the e ect of a variation in the quality of domestic institutions increases with the entry into force of a BIT, suggesting that the latter signals the credibility of an institutional improvement. Overall, when both indirect e ects are considered, the entry into force of a BIT increases bilateral FDI stocks by 16%, on average, a lower impact than those found in previous studies. This e ect nevertheless signi cantly di ers according to the quality of both interstate political relations and domestic institutions. Résumé: La littérature sur la localisation des investissements directs à l'étranger (IDE) ignore, en grande partie, le fait que les entreprises multinationales ne sont pas apatrides et que leurs activités prennent place dans le système politique international. Leur retour sur investissement peut ainsi être grandement a ecté par la qualité des relations politiques entre leur pays d'origine et le pays hôte de leurs investissements. Cet article étudie dans quelle mesure la qualité des relations politiques entre Etats in uence le volume des IDE bilatéraux. En construisant un nouvel indicateur de la qualité des relations politiques internationales, nous montrons qu'entretenir de bonnes relations politiques favorise les IDE bilatéraux. La signature d'un traité bilatéral d'investissement (TBI) limite cependant la pertinence des relations politiques pour les décisions d'investissement. Par ailleurs, l'e et d'une amélioration des institutions domestiques augmente avec l'entrée en application d'un TBI, ce qui suggère que ces accords signalent la crédibilité des institutions domestiques. Dans l'ensemble, lorsque ces deux e ets sont pris en compte, l'entrée en vigueur d'un TBI augmente les stocks bilatéraux d'IDE de 16% en moyenne, un impact moins important que ceux trouvés dans les études précédentes. L'ampleur de cet e et varie cependant beaucoup selon la qualité des relations politiques entre Etats et des institutions domestiques.Mots clés : Investissement direct à l'étranger, Relations politiques internationales, Traités bilatéraux d'investissement, Institutions. JEL classi cation: F21, F53, F59 * We thank Keith Head, Thierry Mayer and Ian Wooton for their helpful comments. A previous version of the paper, entitled Being...

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Section: The Quality Of Interstate Political Relationsmentioning

confidence: 99%

Foreign direct investment and bilateral investment treaties: An international political perspective

Desbordes

Vicard

2009

Journal of Comparative Economics

126

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“…6 In addition to the purely economic characteristics of goods and services such as price, quantity and quality, political relations can also influence trade. Pollins (1989aPollins ( , 1989b (2007) provides evidence that the trade-reducing impact of bad bilateral political relations is reduced if internationalist economic interests are strong, which is proxied for by low trade barriers. According to him, this provides an explanation of the strong commercial ties between the PRC and the ROC despite the obvious tensions.…”

Section: The Politics-trade Nexus and The Role Of Economic Diplomacymentioning

confidence: 99%

“…There is a large literature on the trade-politics nexus that analyzes the economic consequences of bad political relations (e.g., Pollins 1989aPollins , 1989bDavis and Meunier 2011;Pandya and Venkatesan forthcoming). The rise of China to become the world's largest exporter and second largest economy after the United States (CIA 2015) is likely to alter what we know about these relationships.…”

Section: Introductionmentioning

confidence: 99%

China's Economic Diplomacy and the Politics-Trade Nexus

Fuchs

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu JEL classification: F51, F53, H77, O19, P33 Terms of use: Documents in EconStor may

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“…Recent empirical studies also indicate that different economic and political ties between countries are linked to one another. For example, studies have demonstrated the link between trade relations and political/security ties (Rosecrance 1986(Rosecrance , 1999Pollins 1989aPollins , 1989bGowa 1994;Oneal and Russett 1999;Russet and Oneal 2001;Gowa and Mansfield 2004;Biglaiser and DeRouen 2009). A number of studies also highlight the link between trade flows and FDI flows (Jensen 2003(Jensen , 2006Biglaiser and DeRouen 2007;Büthe and Milner 2008) and trade and aid relations (Morrissey et al 1992;McGillivray and Morrissey 1998).…”

Section: Network Position and Structural Inequalitymentioning

confidence: 99%

International Inequality and World Poverty: A Quantitative Structural Analysis

Dasandi

2013

New Political Economy

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Dominant explanations within the existing development literature for the differences in poverty levels around the world have tended to ignore the influence of international inequality on poverty, instead focusing solely on domestic factors. In this paper, I conduct a regression analysis of the effect of inequality between countries on world poverty between 1980 and 2007, employing a new structural measure of international inequality which is created using social network analysis to calculate countries' positions in international trade networks. Countries' infant mortality rates are used to measure poverty. The results of the empirical analysis provide cross-country evidence to demonstrate that structural inequalities in the international system have a significant impact on poverty around the world. As such, the analysis demonstrates the need to move beyond focusing exclusively on domestic attributes of developing countries towards considering the broader international political economy in analysing contemporary poverty.

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Conflict, Cooperation, and Commerce: The Effect of International Political Interactions on Bilateral Trade Flows

Cited by 264 publications

References 21 publications

Foreign direct investment and bilateral investment treaties: An international political perspective

Foreign direct investment and bilateral investment treaties: An international political perspective

China's Economic Diplomacy and the Politics-Trade Nexus

International Inequality and World Poverty: A Quantitative Structural Analysis

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