Abstract

BURGOA TERCEROS, Rodrigo. Effects of the maritime demand at The Hague on bilateral trade flows Bolivia-Chile. rlde [online]. 2017, n.28, pp.7-41. ISSN 2074-4706.

This paper analyzes the effect of the Bolivian announcement in 2011 of taking Chile to the International Court of Justice, in order to solve the historic maritime demand, on Bolivian exports and imports toward and from Chile. The estimation is based on the method of Synthetic Control, with a data panel of 82 countries, including Bolivia, for the period 1991-2015. The panel includes information about macroeconomics, trade, culture, and geography, in order to construct a counterfactual and to use it for a comparison with Bolivia. Thus, it was found that the politic measure was negative for Bolivian exports to Chile. Instead, it was not found a clear impact on Bolivian imports from Chile. Using theory to explain the results, it is argued that the variable 'risk' played an important role for Chilean importers and their decision to demand goods from Bolivia. On the other hand, declarations of Bolivian authorities probably caused more certainty on their compatriots making risk no to rise too much in the decision to import goods from Chile.

Keywords : Maritime demand; Bilateral trade; Political factors; Economic factors; Synthetic control.

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