The Weight of Economic and Commercial Diplomacy
International Institute of Social Studies (ISS) Working Paper No. 478, August 2009
31 Pages Posted: 8 Sep 2009
Date Written: August 30, 2009
This paper investigates the impact of economic and commercial diplomacy on the geography of international trade. We replicate a recent study by Rose (2007) extending the analysis to include the year 2006 and 63 importing and exporting countries. Using a gravity model we are able to demonstrate that diplomatic representation via embassies and consulates is not a relevant trade enhancing factor for trade within the OECD. In contrast diplomatic representation is significant in bilateral trade relationships of developing countries as it both facilitates imports and stimulates exports. We discuss some implications of our findings for developing countries especially in view of South–South trade.
Keywords: gravity model, development, south–south trade, diplomacy
JEL Classification: F19, F55, F59, O19, O24
Suggested Citation: Suggested Citation