Working Paper: CEPR ID: DP7609
Authors: Keith Head; John Ries
Abstract: In an effort to stimulate trade, Canada has conducted regular trade missions starting in 1994, often led by the Prime Minister. According to the Canadian government, these missions generated tens of billions of dollars in new business deals. This paper uses bilateral trade data to assess this claim. We find that Canada exports and imports above-normal amounts to the countries to which it sent trade missions. However, the missions do not seem to have caused an increase in trade. In the preferred specification, incorporating country-pair fixed effects, trade missions have small, negative, and mainly insignificant effects.
Keywords: bilateral trade; export promotion; gravity
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| omitted variable bias (C20) | positive estimates in simpler models (C51) |
| Canadian trade missions (F10) | bilateral trade volumes (F10) |
| Canadian trade missions (F10) | trade levels (F19) |
| trade levels prior to missions (F10) | Canadian trade missions (F10) |
| trade missions (F19) | trade volumes (pair fixed effects model) (F10) |