Contagion influence on trade and investment policy: A network perspective

Adopting a network perspective, we demonstrate that two different, yet complementary, forces influence the formation of trade and investment policy. On the one,hand, nations that are trading partners develop similar policies through a process of close and enduring interaction. On the other hand, nations that compete for trading opportunities adopt comparable policies through a process of establishing similar types of relations with other nations, even though they may not have direct ties to each other. Implications for managers of multinational enterprises are developed.