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Political Determinants of the Extensive and Intensive Margins of International Arms Transfers

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Abstract

The main aim of this paper is to investigate the political determinants of international arms transfers. We distinguish between the decision to exports arms (extensive margin) and the value of the arms exported (intensive margin). A theoretically-justified gravity model of trade augmented with political factors is estimated using a two-stage panel-data approach for 104 exporting countries over the period 1950 to 2007. As main political factors the level of democracy in the trading partners as well as the political orientation of the ruling governments are considered. Furthermore we account for the political differences between trading partners, the political environment differences in their respective regions and the existence of military pacts. The main results indicate that political closeness between countries is an important determinant of transfers in arms and that economic and strategic interests are not the only drivers of the transfers.

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  • Florian Johannsen & Inmaculada Martínez-Zarzoso, "undated". "Political Determinants of the Extensive and Intensive Margins of International Arms Transfers," Ibero America Institute for Econ. Research (IAI) Discussion Papers 228, Ibero-America Institute for Economic Research.
    • Handle: RePEc:got:iaidps:228
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    References listed on IDEAS

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    7. Brauer, Jurgen, 2007. "Arms Industries, Arms Trade, and Developing Countries," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 30, pages 973-1015, Elsevier.
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    More about this item

    Keywords

    arms trade; political factors; democracy; conflict; gravity model; military pacts;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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