Political limits on the world oil trade: firm-level evidence from US firms

Kashcheeva Mila

No 401, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: International politics affect trade patterns, especially for firms in extractive industries. We construct the firm-level dataset for the U.S. oil-importing companies over 1986-2010 to test whether the state of international relations with the trading partners of the U.S. affect importing behavior of the U.S. firms. To measure "political distance" between the U.S. and her trading partners we use voting records for the UN General Assembly. We find that the U.S. firms, in fact, import significantly less oil from the political opponents of the U.S. Our conjecture is that the decrease in oil imports is mainly driven by large, vertically-integrated U.S. firms that engage in foreign direct investment (FDI) overseas.

Keywords: United States; Petroleum; International trade; Petroleum industry; International relations; Oil imports; Political distance; FDI (search for similar items in EconPapers)
JEL-codes: F14 F51 Q34 (search for similar items in EconPapers)
Date: 2013-03-01
New Economics Papers: this item is included in nep-bec, nep-ene and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 401. 2013-03-01

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