INTERNATIONAL-TRADE, POLITICAL CONFLICT COOPERATION, AND GRANGER CAUSALITY/

Theory: Causality between international trade and bilateral conflict/c ooperation, to be investigated, is dyad dependent. Hypotheses: Either international trade causes bilateral conflict/cooperation or bilateral conflict/cooperation causes international trade. Methods: Granger cau sality is formally tested between quarterly trade data and quarterly s eries for conflict/cooperation A long conflict/cooperation series is c onstructed from 1960 to the early 1990s by splicing COPDAB and WEIS, t wo events data sets that are most widely used. A total of 16 dyads are investigated individually by assuming that the direction and the stre ngth of causality may differ from one dyad to another. Results: Grange r causality between bilateral conflict/cooperation and international t rade, which is dyad dependent, tends to be reciprocal.