Exploring Intra-Commonwealth Goods and Services Trade

36 Pages Posted: 25 Jan 2016

See all articles by Anirudh Shingal

Anirudh Shingal

S.P. Jain Institute of Management & Research; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Bern - World Trade Institute

Mohammad A. Razzaque

Government of the United Kingdom - Commonwealth Secretariat; Commonwealth Secretariat, London

Date Written: March 1, 2015

Abstract

Existing work examining the trade effect of commonwealth membership does not account for sample selection, unobserved heterogeneity and multilateral resistance in estimation, leading to biased estimates. Our analyses improve on all these fronts. Unlike earlier work, we also consider services trade and assemble a much larger sample of trading partners (242 x 242, over 1995-2010). Commonwealth membership is found to increase goods exports by 18.5-33.2% and services exports by 42.8% in our results, ceteris paribus and on average. Our analyses on the determinants of intra-commonwealth trade suggest the positive role of common language (only for goods trade) and colonial relationships as well as the negative impact of geography, thereby confirming that commonwealth member states are not natural trading partners for each other. Finally, being one of Australia, Canada or the UK is associated with 98.2% greater merchandise trade than the commonwealth average; however, a similar effect is not observed for services trade.

Keywords: Commonwealth, trade, sample selection, high-dimensional fixed effects, multilateral resistance, bilateral trade costs

JEL Classification: F10, F14

Suggested Citation

Shingal, Anirudh and Razzaque, Mohammad A., Exploring Intra-Commonwealth Goods and Services Trade (March 1, 2015). Available at SSRN: https://ssrn.com/abstract=2721153 or http://dx.doi.org/10.2139/ssrn.2721153

Anirudh Shingal (Contact Author)

S.P. Jain Institute of Management & Research ( email )

Munshi Nagar, Dadabhai Road
Andheri West
Mumbai, Maharashtra 119579
India

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

University of Bern - World Trade Institute ( email )

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Bern, 3012
Switzerland

HOME PAGE: http://www.nccr-trade.org

Mohammad A. Razzaque

Government of the United Kingdom - Commonwealth Secretariat ( email )

Marlborough House, Pall Mall
London
United Kingdom
+44 20 7747 6261 (Phone)

Commonwealth Secretariat, London

Marlborough House, Pall Mal
London, SW1Y 5HX
United Kingdom

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