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Embassies matter for trade, but diplomats matter most: evaluation of Dutch economic diplomacy in Latin America

In: Research Handbook on Economic Diplomacy

Author

Listed:
  • Phil Compernolle
  • Mark Vancauteren

Abstract

The authors investigate to what extent Dutch economic diplomacy explains trade with Latin America, employing a constructed firm-level dataset that links international trade with firm-level characteristics for the period 2006–11. They capture the role of economic diplomacy on the basis of a novel construct that weights each embassy on its attention to economic diplomacy. Furthermore, the authors include firms that made use of economic diplomacy but did not subsequently trade with Latin America during the study period. Their results suggest that economic diplomacy in the form of information services and trade missions has a significant and positive impact on firm-level exports to Latin America. Their results remain robust when they take into account the role of endogeneity, zero trade flows, unobserved firm-level heterogeneity and country-specific destinations.

Suggested Citation

  • Phil Compernolle & Mark Vancauteren, 2018. "Embassies matter for trade, but diplomats matter most: evaluation of Dutch economic diplomacy in Latin America," Chapters, in: Research Handbook on Economic Diplomacy, chapter 10, pages 144-164, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:16053_10
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