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Network analysis reveals a 58% trade increase between country pairs per doubling of institutional ties, suggesting organizational embeddedness facilitates international commerce.
Membership in certain intergovernmental organizations (IGOs), such as the World Trade Organization, has long been argued to stimulate trade. Yet, evidence linking IGOs to trade is mixed. The authors argue that identifying the influence of IGOs requires attention not only to the institutions IGOs enact, but also to the network through which they enact them. This approach allows them to demonstrate that trade between two countries increases by an average of 58% with every doubling of the strength of IGO connection between the countries. They also contribute to debates regarding the mechanisms through which structural relationships influence economic behavior by showing that substantial trade benefits occur not only through economic IGOs, but also through IGOs that were formed for social and cultural purposes, and that connections through IGOs that are organizationally strong have more impact than those through minimalist IGOs.
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Ingram et al. (2005) studied this question.
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