We are highly thankful to the associate editor, Scott Baier, and to two anonymous referees of this journal for their comments that have significantly improved our paper. We are also grateful to Alex Braithwaite, Mathieu Couttenier, Han Dorussen, Davide Ticchi, Stergios Skaperdas and Eik Swee for their extremely helpful insights. We also thank seminar participants at the University of Essex, University of Amsterdam, IMT Lucca and at the Catholic University of Milan, as well as participants at the ISA conference in San Francisco for valuable comments on earlier versions of the manuscript. The responsibility for any remaining errors or omissions is our own. The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission.
US Security Strategy and the Gains from Bilateral Trade
Version of Record online: 15 JUL 2014
© 2014 John Wiley & Sons Ltd
Review of International Economics
Volume 22, Issue 5, pages 863–885, November 2014
How to Cite
Bove, V., Elia, L. and Sekeris, P. G. (2014), US Security Strategy and the Gains from Bilateral Trade. Review of International Economics, 22: 863–885. doi: 10.1111/roie.12141
- Issue online: 3 OCT 2014
- Version of Record online: 15 JUL 2014
We explore the geo-strategic determinants of bilateral trade flows between the USA and the rest of the world. We develop a three-party model of security and trade patterns and use data on military assistance and troop deployments over the 1950–2009 period to validate its predictions. We find that security assistance has significant, positive impacts on the shares of bilateral trade between the USA and the recipient country, results that are robust to issues of reverse causality and hold across different sectors.