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Impact of the Presence of Foreign Missions on Trade: Evidence from Turkey

Yusuf Bağır ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyzes the impact of presence of foreign missions on trade using Turkey’s unique expansion in its foreign mission network (37 new embassies in 8 years) as the source of variation in a dynamic panel data setting. The dependent variable is the trade between Turkey and 186 countries from 2006 to 2014. The results indicate that presence of an embassy increases export value by 27% and this increase comes mainly from volume effect. Categorizing goods by the Rauch (1999) classification shows that increase in differentiated goods exports explains almost all of the change in total export value. There is no statistically significant impact on the exports of homogeneous goods. Replication of the analysis for imports suggests that presence of an embassy leads to 70% increase in imports and this increase is entirely driven by the homogeneous goods imports.

Keywords: International Economics; Foreign Missions; Turkey; International Trade; Embassy (search for similar items in EconPapers)
JEL-codes: F0 F00 F1 F10 F14 H0 (search for similar items in EconPapers)
Date: 2017-08-17
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-int
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