Asymmetric Trade Dependence and Interstate Conflict Embedded in Networks

Extant research suggests that the pacifying effects of trade on conflict are more clearly seen in symmetric dyads. However, symmetric dyads are more likely to be of material power parity, while material power parity is supposed to increase the risk of conflict. This study evaluates the impacts of asymmetric trade dependence on the risk of conflict by distinguishing and evaluating the impact of size asymmetry, material power preponderance and asymmetric trade dependence on the risk of conflict. Using temporal exponential random graph models with a dataset consisting of all states from 1951 to 1999, this study finds that the economic size asymmetry has negative effects on the onset of MID through the pacifying effects of a preponderance of material capabilities. The asymmetric trade dependence has significantly positive effects on the onset of militarized disputes. Such effects are significantly higher when there is no onset of sanctions beforehand or when the extra-dyadic trade concentration level is lower.