Political Distance between Countries and International Trade
2017/06/01
研討會日期 : 2017-06-01
時間 : 14:30
主講人 : Ms. Jing Lou
主持人 : Professor Chu-An Liu
地點 : Conference Room B110
演講者簡介 : Ms. Lou is currently a Ph. D. student at the Department of Economics, National University of Singapore. Her supervisor is Professor Davin Chor and her research topic is "Trade Distances with Model Uncertainty".
演講摘要 : This paper explores how political distance change between two countries affects their bilateral trade in the contemporary world. Sourcing from the Database of Political Institutions (DPI), the political distance is measured by the distance in the ideology of the party in government, based on a left-right political scale. Using data between 1995-2012, we find that an increment in the political distance between a country pair significantly reduces their bilateral trade, although the magnitude of the effect is small. Besides, petroleum trade is found to be the most sensitive to political distance change. We also show that the trade-reducing effects of political distance and war history are complementary, i.e. bilateral trade is more sensitive to political distance change if the trading partners are ever at war in the history during 1816-1994, and war history reduces trade more severely when political distance increases.
