Trade and Empire*

We employ a new database of over 21,000 bilateral trade observations from 1870–1913 to assess the contemporaneous effects of empire on trade. Our analysis shows that belonging to an empire roughly doubled trade relative to those countries that were not part of an empire. The use of a common language, the establishment of currency unions, the monetisation of recently acquired colonies, and the establishment of preferential trade agreements and customs unions help to account for the observed increase in trade associated with empire.