Skip to main content Accessibility help
×
Home
Hostname: page-component-55597f9d44-qcsxw Total loading time: 0.308 Render date: 2022-08-13T00:29:40.866Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "useRatesEcommerce": false, "useNewApi": true } hasContentIssue true

10 - Diplomatic relations and trade reorientation in transition countries

Published online by Cambridge University Press:  01 June 2011

E. R. Afman
Affiliation:
Ministry of Finance, Netherlands
M. Maurel
Affiliation:
University of Paris 1, France
Peter A. G. van Bergeijk
Affiliation:
Institute of Social Studies, The Hague
Steven Brakman
Affiliation:
Rijksuniversiteit Groningen, The Netherlands
Get access

Summary

Introduction

After the fall of the Berlin Wall on November 9th, 1989 and the dissolution of the Soviet Bloc, western countries and firms entered eastern markets; inversely western markets are nowadays more open for eastern goods – trade no longer being organized by the Council of Mutual Economic Assistance (CMEA). Trade reorientation is one of Nauro Campos and Fabrizio Coricelli's (2002) “magnificent seven stylized facts of ten years of transition.” Simultaneously with this economical reorientation, we witnessed the births of new diplomatic relationships, while older ties were renewed.

But there exists some variance: some countries invested more than others in new diplomatic relations. France and the Netherlands are for instance very active on the diplomatic front. These countries both created no fewer than ten new embassies in Eastern Europe and the Former Soviet Union within a time span of less than ten years. Some other countries were less active: they opened smaller consulates, or – for the moment – opted to stay out. Arguably, the decision to open an embassy is foremost a political one, but there is an economic meaning as well.

This chapter goes in search of the economic rationale behind permanent representations, the so-called “foreign mission.” More specifically, we ask the empirical question whether diplomatic relationships could be associated with different trade intensities. Does a country with intensive missions abroad (like France or the Netherlands) export more than other countries if we control for other determinants of trade?

Type
Chapter
Information
The Gravity Model in International Trade
Advances and Applications
, pp. 278 - 295
Publisher: Cambridge University Press
Print publication year: 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)
16
Cited by

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×