Military Allies and International Trade: Lessons for Geoeconomics

Ethan Kapstein and Malia Sayad
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Ethan Kapstein: Princeton University
Malia Sayad: University of Oxford.

Empirical Studies of Conflict Project (ESOC) Working Papers from Empirical Studies of Conflict Project

Abstract: The purpose of this paper is to offer an empirical reappraisal of the relationship between military alliances and international trade, using "best practices" in gravity modeling. Specifically, we address three questions. First, do military allies trade more with one another than they do with other countries? Second, is accession to an alliance associated with an increase in trade between "new" and “old†members? Third, do allies more or less with their adversaries than with other countries? Focusing on the members of the North Atlantic Treaty Organization (NATO), we find that alliance accession is indeed associated with increased levels of trade, but overall, allies do not trade more with one another than they do with other countries (including their adversaries). Our research thus provides only partial support for some of the earlier studies that assessed the Effects of military alliances on international trade patterns.

Keywords: Military Alliances; International Trade; Geoeconomics; Gravity Models; NATO; Trade Accession Effects; Security Externalities (search for similar items in EconPapers)
JEL-codes: D74 F13 F14 (search for similar items in EconPapers)
Date: 2026-01
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Persistent link: https://EconPapers.repec.org/RePEc:pri:esocpu:41

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