Volume 28, Issue 3

This paper examines the timing behind the decision of countries to enter into regional trade agreements or interstate military conflicts, considering these two potential actions as substitute strategies. Using bilateral data from 1950 to 2014, I employ survival analysis to examine the factors that determine the likelihood of two countries entering into a regional trade agreement or a military conflict at any point in time. Historical or recent wars are posited to raise the gains from trade and therefore increase the likelihood that two countries choose to join the same trade agreement. On the other side, the existence of a strong trade relationship may raise the opportunity cost of entering into a conflict; bilateral trade flows and common membership in a regional trade agreement are posited to impact the likelihood of conflict. Other explanatory variables that affect the likelihood of either a common trade agreement or a military conflict include economic size, measured as the product of and the difference in the two countries’ GDPs; level of development, measured as the product of and the difference in the two countries’ per-capita GDPs; geography, measured by distance, contiguity, landlocked status, and island status; institutional linkages, represented by a common language, a colonial relationship, or a common legal origin; and political variables, including WTO membership, democracy, military alliances, and being a major oil producer. Results show that economic, geographic, institutional, and political variables all influence the probability that two countries enter into a conflict or join the same regional trade agreement.

This paper investigates the impact of climate variability on trust in Vietnamese rural households. I contribute to the existing literature, mainly focused on natural disasters, by studying the impact on trust of smooth climate changes. Climate variations are measured using deviations of the minimum temperature in June from the average. I argue that increases in this variable are relevant for the rice, which is the staple food in Viet Nam. Increases in minimum temperatures may reduce rice yields and this, in turn, may affect individuals’ propensity to cooperate. Trust is measured using VARHS survey conducted from 2008 to 2014. Estimation of a linear probability model reveals a significantly positive association between the two variables of interest, which is robust after controlling for several checks.

We explore the relationship between Liquified Natural Gas (LNG) and Liquified Petroleum Gas (LPG) carrier freight rates and global geopolitical risk, while also controlling for the macro environment. Our results show that a shock in geopolitical risk significantly increases the cost of the spot charter rates for both LNG and LPG carriers, with the impact reaching around 25% for the former and 18% for the latter. Our results bear significant implications for both the companies and the countries involved in the liquefied gas trade, with its importance growing as the use of this energy source is likely to continue substituting other fossil fuels in the future.

This paper investigates the impact of militarization on income inequality. The analysis is conducted on a panel of 40 European countries over the period 2000–2017. The degree of militarization of a country is captured by means of the Global Militarization Index (GMI) and we employ the Gini index as a measure of inequality. The main findings show that militarization and inequality are positively associated. The findings appear to be robust. We also consider control variables related to military commitment, namely (i) conscription; (ii) NATO membership; (iii) involvement in an armed conflict. Interestingly conscription appears to be negatively associated with income inequality whereas an armed conflict and NATO membership show the opposite sign. For sake of robustness, we undertake the same estimations on alternative samples of countries and results are confirmed. Eventually, to deal with the issue of endogeneity, we apply the Lewbel, IV–GMM approach and results are confirmed.