Working Paper: CEPR ID: DP4953
Authors: Andrew K. Rose
Abstract: As communication costs fall, foreign embassies and consulates have lost much of their role in decision-making and information-gathering. Accordingly, foreign services are increasingly marketing themselves as agents of export promotion. I investigate whether exports are in fact systematically associated with diplomatic representation abroad. I use a recent cross-section of data covering 22 large exporters and 200 import destinations. Bilateral exports rise by approximately 6-10% for each additional consulate abroad, controlling for a host of other features including reverse causality. The effect varies by exporter, and is non-linear; consulates have smaller effects than the creation of an embassy.
Keywords: consulate; country; data; destination; empirical; gravity; import; international; panel
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Each additional consulate (F29) | Bilateral exports (F10) |
| Foreign missions (F53) | Higher export levels (F10) |
| Foreign missions (F53) | Exports (F10) |
| Foreign missions (F53) | Export determinants (economic mass, distance) (R12) |