Dyadic Trade, Exit Costs, and Conflict

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16 Scopus citations

Abstract

Most studies of the link between dyadic trade and militarized conflict examine the extent of trade interaction. However, interaction measures do not account for the impact of cutting off trade (i.e., exit costs). In this article, I highlight the link between exit costs, the cost of conflict, and "the spoils of conquest," arguing that one state's exit costs are associated with higher incidence of dyadic conflict when its trade partner's exit costs are low. However, its exit costs become less aggravating-and eventually pacifying-as its trade partner's exit costs increase. I test this argument by estimating import demand and export supply elasticities, developing yearly exit cost measures for directed dyads, 1984-2000. Statistical tests confirm that unilaterally high exit costs are aggravating, but that jointly high exit costs are pacifying, a pattern most prominent for trade in strategic commodities.

Original languageEnglish (US)
Pages (from-to)564-591
Number of pages28
JournalJournal of Conflict Resolution
Volume58
Issue number4
DOIs
StatePublished - Jun 2014
Externally publishedYes

Keywords

  • trade and conflict
  • trade elasticities
  • vulnerability

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Sociology and Political Science
  • Political Science and International Relations

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