Do Leader’s Visits Increase Trade Flows?

Oasis Kodila-Tedika and Sherif Khalifa

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the effect of the number of visits by U.S. officials to a country, and the number of visits of the country’s leaders to the United States, on bilateral trade flows between the country and the United States. To achieve our objective, we compile novel variables that indicate the number of official visits from 1960-2015 from the historical archives of the U.S. State Department. To deal with potential endogeneity, we use instrumental variables panel data techniques such as dynamic GMM and systems GMM estimations. The estimation results show that the visits by U.S. Presidents and Secretaries of State do not have a statistically significant effect on bilateral trade flows, while the leader’s trips to the United States have a statistically significant positive effect. This indicates that the leader’s trips to the United States are taken as an opportunity to promote free bilateral trade flows between the country and the United States, while the visits of American officials focus on other issues.

Keywords: Trade; Executive; Leader’s Trips (search for similar items in EconPapers)
JEL-codes: F10 H11 (search for similar items in EconPapers)
Date: 2021-01-26
New Economics Papers: this item is included in nep-his and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:105577

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