Impact of the Presence of Embassies on Trade: Evidence from Turkey

Yusuf Bağır

World Trade Review, 2020, vol. 19, issue 1, 51-60

Abstract: This paper analyzes the impact of the presence of foreign missions on trade using Turkey's unique expansion in its foreign embassy network (39 new embassies in 8 years) as the source of variation in a panel data setting. A majority of the existing empirical studies use cross-sectional bilateral trade data due to lack of variation over time (Rose, 2007; Moons and Bergeijk, 2013). Employing a panel data analysis, this paper is able to address the endogeneity issues that are associated with a standard cross-sectional analysis. The dependent variable in the paper is the trade between Turkey and 190 countries for 2006 to 2016. The results indicate that presence of an embassy increases export value by 30% and this increase comes mainly from the volume effect. Categorizing goods by the Rauch (1999) classification shows that the increase in differentiated goods exports is the main driver of the export surge. The number of exporting firms increases by about 8%. There is no statistically significant impact on the exports of homogeneous goods. Replication of the analysis for imports suggests no impact on imports.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

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:cup:wotrrv:v:19:y:2020:i:1:p:51-60_3

Access Statistics for this article

More articles in World Trade Review from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().