Table 7.
Alternative Geopolitical Measures
| UN Voting | ODA | Arms Imports | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EMDE (1) | AE (2) | EMDE (3) | EMDE (4) | AE (5) | ||||||
| Lagged Reserve Share | 0.54*** | 0.74*** | 0.68*** | 0.67*** | 0.78*** | |||||
| (0.05) | (0.09) | (0.02) | (0.02) | (0.06) | ||||||
| Trade Share | -0.02 | 0.13 | -0.06 | -0.08 | 0.11 | |||||
| (0.11) | (0.09) | (0.10) | (0.09) | (0.13) | ||||||
| FX Alignment | -0.10*** | -0.06*** | -0.05*** | |||||||
| (0.01) | (0.01) | (0.01) | ||||||||
| Debt Share | 0.12*** | 0.11*** | 0.10*** | |||||||
| (0.04) | (0.03) | (0.03) | ||||||||
| Bank Claims Share | 0.06 | 0.08*** | ||||||||
| (0.05) | (0.03) | |||||||||
| UN Votes | 0.06 | 0.17*** | ||||||||
| (0.04) | (0.06) | |||||||||
| ODA Share | -0.03** | |||||||||
| (0.01) | ||||||||||
| Share in Arms Imports | 0.04*** | 0.02 | ||||||||
| (0.02) | (0.02) | |||||||||
| Observations | 1,102 | 288 | 1,585 | 1,585 | 417 | |||||
| R-squared | 0.35 | 0.62 | 0.53 | 0.53 | 0.69 | |||||
Robust standard errors in parentheses. ***, **, * indicates significance at the 1%, 5%, and 10% levels, respectively. All specifications include time and country-currency fixed effects. Reserve shares for four reserve currencies (US dollar, British pound, Japanese yen, and euro) are obtained from the central banks’ websites. “Trade Share” is the share of trade with the reserve issuer, obtained from the Direction of Trade Statistics
“FX Alignment” is a dummy variable equal to one if the exchange rate co-moves with the reserve currency, as estimated by Ilzetzki et al. (2019). “Debt Share” is the share of public debt denominated in a given reserve currency, obtained from the World Bank’s International Debt Statistics dataset. “Bank Claims Share” is the share of cross-border bank claims denominated in a given reserve currency obtained from the Bank for International Settlement’s international banking data by location. “UN Votes” is the share of votes cast the same way as the reserve issuer at the UN General Assembly, with abstentions counted as “no” votes (Voeten 2013). “ODA Share” is the share of official development assistance received from the reserve issuer, sourced from the Organisation for Economic Co-operation and Development. “Share in Arms Imports” is the share of imports of arms and ammunition (classified under Harmonized System Chapter 93) from the reserve issuer, obtained from UN Comtrade. AE = advanced economies; EMDE = emerging market and developing economies; ODA = official development assistance