International Friends and Enemies / Benny Kleinman, Ernest Liu, Stephen J. Redding.

Format:

Book

Author/Creator:

Kleinman, Benny.

Contributor:

National Bureau of Economic Research.

Liu, Ernest.

Redding, Stephen J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27587.

NBER working paper series no. w27587

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We examine whether as countries become more economically dependent on a trade partner, they realign politically towards that trade partner. We use network measures of economic exposure to foreign productivity growth derived from the class of trade models with a constant trade elasticity. We establish causality using two different sources of quasi-experimental variation: China's emergence into the global economy and the reduction in the cost of air travel over time. In both cases, we find that increased economic friendship causes increased political friendship, and that our theory-based network measures dominate simpler measures of trading relationships between countries.

Notes:

Print version record

July 2020.