The “Peace Dividend” of International Trade: A New Empirical Approach

Ling Feng, Qiuyue Huang, Zhiyuan Li and Christopher Meissner

No 35078, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the causal impact of international trade on interstate military conflicts using global bilateral data from 1962 to 2014. To address endogeneity concerns, we exploit exogenous spatial-temporal variation in international trade stemming from technological advances in air relative to maritime transport. Empirical results demonstrate a strong “peace dividend” of international trade: that is, increased trade significantly reduces the probability and intensity of conflicts between nations. This effect remains robust across specifications and withstands a wide range of potential confounders. Such findings highlight how economic interdependence shapes international conflict, a relationship that is especially relevant amid escalating geopolitical tensions and the global shift toward “decoupling”, “de-risking”, and greater trade protectionism.

JEL-codes: F14 F51 F69 (search for similar items in EconPapers)
Date: 2026-04
New Economics Papers: this item is included in nep-his and nep-tre
Note: DAE ITI POL
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w35078.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:35078

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w35078
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().