Analysis on the Motivation and Welfare of International Conflicts in Trade Dependence

Jiaomei Tang, Yayun Ren, Yongliang Zhao and Xiaotong Zhang

Emerging Markets Finance and Trade, 2023, vol. 59, issue 3, 737-753

Abstract: This article explores the trade dependency of international conflict and post-conflict welfare changes in third-party nations based on the likelihood of international conflict breakout and its magnitude using international conflict and bilateral trade data for 174 countries. In our research, we discovered that trade dependency has an inverted U-shaped connection with the likely and size of international conflict, whereas trade asymmetry has a non-linear association with the likelihood and magnitude of international conflict. Further investigation finds that the impact of trade dependency on international conflict is stronger in strategic sectors than in other industries, and that trade dependence asymmetry in strategic industries has no substantial impact on international conflict. In the short and long run, trade in third-party nations following international conflict has substitution effect on conflict countries. The conclusions of this article offer fresh perspectives on how to enhance economic and trade cooperation while also settling international issues.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:59:y:2023:i:3:p:737-753

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DOI: 10.1080/1540496X.2022.2119812

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