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Do trade missions increase trade?

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  • 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. Dans un effort pour stimuler le commerce international, le Canada a mené des missions commerciales depuis 1994, souvent sous la direction du Premier Ministre. Selon le gouvernement canadien, ces missions ont engendré des dizaines de millions de dollars en relations d’affaires. Ce texte utilise des données sur le commerce bilateral pour évaluer cette proposition. On découvre que le Canada exporte et importe des quantités au dessus de la normale vers et en provenance des pays où il a mené des missions commerciales. Cependant, les missions ne semblent pas avoir causé un accroissement du commerce. Dans la spécification préférée, incorporant les effets fixes des paires de pays, les missions commerciales ont des effets faibles, négatifs, et en gros insignifiants.

Suggested Citation

  • Keith Head & John Ries, 2010. "Do trade missions increase trade?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(3), pages 754-775, August.
    • Handle: RePEc:wly:canjec:v:43:y:2010:i:3:p:754-775
    DOI: 10.1111/j.1540-5982.2010.01593.x
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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