International trade, political conflict/cooperation, and Granger causality

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