The Determinants of Trade on Conflict – Some Evidence from Emerging Market Economies

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Eric M.P Chiu

Abstract

          Recent empirical studies have reached mixed results on the effects of international trade and the likelihood of conflict. We argue that this relationship is likely to depend both on economic factors as well as political considerations including power capability of the government and the degree of democracy. Using the disaggregated data for a sample of 42 emerging market countries from 1995-2015, we discover some interesting patterns on international trade, democracy and power capability. We also find strong support for the liberal proposition that a more trade-oriented and democratic political system is more likely to reduce conflict particularly for emerging market economies.

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