Non-Economic Engagement and International Exchange: The Case of Environmental Treaties

Andrew Rose () and Mark M Spiegel ()

No 5942, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine the role of non-economic partnerships in promoting international economic exchange. Since far-sighted countries are more willing to join costly international partnerships such as environmental treaties, environmental engagement tends to encourage international lending. Countries with such non-economic partnerships also find it easier to engage in economic exchanges since they face the possibility that debt default might also spill over to hinder their non-economic relationships. We present a theoretical model of these ideas, and then verify their empirical importance using a bilateral cross-section of data on international cross-holdings of assets and environmental treaties. Our results support the notion that international environmental cooperation facilitates economic exchange.

Keywords: arrangement; assets; debt; discount; empirical; partnership; reputation; theory (search for similar items in EconPapers)
JEL-codes: F02 F10 F34 (search for similar items in EconPapers)
Date: Written
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Related works:
Working Paper: Non-economic engagement and international exchange: the case of environmental treaties (2006)
Working Paper: Non-Economic Engagement and International Exchange: The Case of Environmental Treaties (2008)
Journal Article: Noneconomic Engagement and International Exchange: The Case of Environmental Treaties (2009)
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