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date: 23 April 2021

Abstract and Keywords

A large body of research explores how the extent of trade flows affects a variety of international political outcomes, yet remarkably few studies have considered how these relationships could depend on the composition of trade. This chapter suggests that the changing nature of trade away from the one-way exchange of distinct commodities toward the increasing prevalence of two-way exchanges of similar commodities suggests an opportunity to improve understanding of how the composition of trade influences world politics. This chapter discusses the distinction between intra- and inter-industry trade, outlines several conceptual issues surrounding identification and measurement of intra-industry trade, and then explores research areas in which trade composition could be an important explanatory factor for international political outcomes, specifically suggesting that higher proportions of bilateral intra-industry trade within bilateral relationships may promote the formation of preferential trade agreements, foster increasing political affinity, and reduce states’ propensity to engage in militarized conflict.

Keywords: intra-industry trade, trade composition, political affinity, militarized conflict preferential trade agreements

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