Year: 2023
Type: article
Abstract: This paper investigates the effect of bilateral relations on exports using data from Google Global Data. It finds that bilateral relations significantly reduced the negative effect of cultural distance on exports, indicating that they can promote exports by reducing trade costs. The paper finds that higher average Goldstein scores of events correlated with more exports and that bilateral relations had a larger effect on trust‐intensive products, indicating that positive relations built trust and decreased the emotional distance between trading partners. The results also show that bilateral relations promoted exports at both the intensive and extensive margins but with a greater effect on the latter. Finally, bilateral relations had a greater positive effect on developing countries than on developed ones. The results were qualitatively unchanged when endogeneity issues and robustness concerns were considered.
Source: China & World Economy
DOI: 10.1111/cwe.12463
Authors: Jing Li, Hongkui Liu, Qian Xie
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4317628591