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Non-Economic Engagement and International Exchange: The Case of Environmental Treaties

Author

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  • Rose, Andrew
  • Spiegel, Mark
Abstract
We examine the role of non-economic partnerships in promoting international economic exchange. Since far-sighted countries are more willing to join costly international partnerships such as environmental treaties, environmental engagement tends to encourage international lending. Countries with such non-economic partnerships also find it easier to engage in economic exchanges since they face the possibility that debt default might also spill over to hinder their non-economic relationships. We present a theoretical model of these ideas, and then verify their empirical importance using a bilateral cross-section of data on international cross-holdings of assets and environmental treaties. Our results support the notion that international environmental cooperation facilitates economic exchange.

Suggested Citation

  • Rose, Andrew & Spiegel, Mark, 2006. "Non-Economic Engagement and International Exchange: The Case of Environmental Treaties," CEPR Discussion Papers 5942, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5942
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    More about this item

    Keywords

    Assets; Debt; Theory; Reputation; Discount; Empirical; Arrangement; Partnership;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F10 - International Economics - - Trade - - - General
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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