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Bilateral Relations and Exports: Evidence from Google Big Data

Author

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  • Jing Li
  • Hongkui Liu
  • Qian Xie

Abstract

This paper investigates the effect of bilateral relations on exports using data from Google Global Data. It finds that bilateral relations significantly reduced the negative effect of cultural distance on exports, indicating that they can promote exports by reducing trade costs. The paper finds that higher average Goldstein scores of events correlated with more exports and that bilateral relations had a larger effect on trust‐intensive products, indicating that positive relations built trust and decreased the emotional distance between trading partners. The results also show that bilateral relations promoted exports at both the intensive and extensive margins but with a greater effect on the latter. Finally, bilateral relations had a greater positive effect on developing countries than on developed ones. The results were qualitatively unchanged when endogeneity issues and robustness concerns were considered.

Suggested Citation

  • Jing Li & Hongkui Liu & Qian Xie, 2023. "Bilateral Relations and Exports: Evidence from Google Big Data," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 182-210, January.
  • Handle: RePEc:bla:chinae:v:31:y:2023:i:1:p:182-210
    DOI: 10.1111/cwe.12463
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    Cited by:

    1. Ligang Song & Yixiao Zhou, 2023. "Guest Editors' Words," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 1-4, January.
    2. Zhiyuan Li & Yichun Lin & Mingyao Xu, 2024. "Foreign Ownership and International Trade Performance in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 32(2), pages 42-72, March.

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