From toys to warships: Interdependence and the effects of disaggregated trade on militarized disputes

Abstract

The United States recently proposed to sell Saudi Arabia advanced weaponry worth 20 billion dollars over the next 10 years. The volume of trade, while significant, is second in the news headline that the United States would provide Saudi Arabia with precision-guided bombs, upgrades to its fighters, and new naval vessels. Trade of strategic commodities, such as armaments, suggests a strong interdependence between countries, which may influence international relations differently than the same volume of toys traded between nations. The author posits the volume and pattern of commodities that countries trade with each other are both relevant to interstate conflict. Commodities are heterogeneous and thus vary in terms of their strategic importance, substitutability, and ease of expropriation. This heterogeneity, along with the volume of trade, influences the opportunity cost of lost trade caused by conflict. This article empirically examines whether the pattern of trade is relevant to conflict for the period 1962—2000. The results from both single and simultaneous equations models indicate that increasing the share of bilateral trade in energy, non-ferrous metals, and electronics increases conflict, whereas for chemicals and arms it reduces conflict. Differences in these strategic commodities’ elasticity of import demand and export supply, along with their ease of expropriation, contribute to the heterogeneous effects.

International Trade and The Onset and Escalation of Interstate Conflict: More to Fight About, or More Reasons Not to Fight?

“…A limitation is that I do not directly explore the role of firms or other sub-state actors, or of different types of traded goods in each stage of the conflict process. Some research has shown that not all traded goods are equal in their potential role in conflict (Dorussen 2006;Dorussen and Ward 2011;Goenner 2010), which is consistent with my approach and a promising area for further inquiry.…”

Fossil Fuel Rents: Who Initiates International Crises?

“…With a few exceptions (Goenner, 2010) The results indicate that countries with oil rents acknowledge the instability of the oligopolistic market that oil belongs to, and they choose a pacifier's behavior in their relations with other states. Countries with rents from monopolistic and free markets products -although very different structures-behave similarly with a positive relationship to crisis initiation.…”

Money can't buy you love: the European Union member states and Iranian nuclear programme 2002–2009

“…They are therefore important for the well-being of all voters, not only a limited group. Some limited application of the qualitative research tradition into the quantitative research has been applied by Dorussen (2006) and Goenner (2010). In analysing the trade in strategic commodities, both sensitivity and vulnerability come into play -sensitivity traditionally reflecting the amount of trade and vulnerability reflecting the cost of being hurt by the discontinuation of the trade (Barbieri 2003).…”

“…In order to look only at the strategic goods, I employ the categorization and list developed by Goenner (Goenner 2010). In one of the sub-models, I focus particularly on the trade in energy (oil, natural gas, coal, and electricity).…”