The Effects of Political Institutions on the Extensive and Intensive Margins of Trade
Name
democracyTrade.pdf
Description
Submitted version
Size
1.07 MB
Format
Adobe PDF
Checksum (MD5)
8a60cdebaacfd52b587a63212d4ef073
Author(s)
Kim, In Song
Londregan, John
Ratkovic, Marc
Date Issued
2019
Journal
International Organization
Publisher
Cambridge University Press (CUP)
Citation
Kim, In Song et al. "The Effects of Political Institutions on the Extensive and Intensive Margins of Trade." International Organization 73, 4 (2019): 755-792 © 2019 The IO Foundation
Version
Original manuscript
Abstract
We present a model of political networks that integrates both the choice of trade partners (the extensive margin) and trade volumes (the intensive margin). Our model predicts that regimes secure in their survival, including democracies as well as some consolidated authoritarian regimes, will trade more on the extensive margin than vulnerable autocracies, which will block trade in products that would expand interpersonal contact among their citizens. We apply a two-stage Bayesian LASSO estimator to detailed measures of institutional features and highly disaggregated product-level trade data encompassing 131 countries over a half century. Consistent with our model, we find that (a) political institutions matter for the extensive margin of trade but not for the intensive margin and (b) the effects of political institutions on the extensive margin of trade vary across products, falling most heavily on those goods that involve extensive interpersonal contact.
MIT Department
Massachusetts Institute of Technology. Department of Political Science
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Creative Commons Attribution-Noncommercial-Share Alike
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DOI of Published Version
https://doi.org/10.1017/s0020818319000237
