Je T'Aime, Moi Non Plus: Bilateral Opinions and International Trade

Abstract

This paper studies the relationship between bilateral trade patterns and opinions. It uses the Eurobarometer public opinion surveys published by the European Commission, which provide data on the share of the population in each EU member country in favor of each CEEC joining the EU. Our results first suggest that bilateral opinions have a statistically robust and relatively large effect on imports, even when standard and new covariates capturing proximity between countries are controlled for. We interpret this effect as reflecting a positive impact of 'bilateral affinity' on trade patterns. We also show that it is possible to go some way towards explaining the variance in bilateral opinions among our sample. Last, we provide some preliminary attempts to determine causality between bilateral opinions and imports.

Keywords: Gravity, bilateral opinions, enlargement

JEL Classification: F10