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Freedom Fries

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  • Guy Michaels
  • Xiaojia Zhi

Abstract

Do firms always choose the cheapest suitable inputs, or can group attitudes affect their choices? To investigate this question, we examine the deterioration of relations between the United States and France from 2002-2003, when France's favorability rating in the US fell by 48 percentage points. We estimate that the worsening attitudes reduced bilateral trade by about 9 percent and that trade in inputs probably declined similarly, by about 8 percent. We use these estimates to calculate the average decrease in firms' willingness to pay for French (or US) commodities when attitudes worsened. (JEL D24, F13, F14, L14, L21)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 2 (2010)
Issue (Month): 3 (July)
Pages: 256-81

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Handle: RePEc:aea:aejapp:v:2:y:2010:i:3:p:256-81

Note: DOI: 10.1257/app.2.3.256
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References

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  2. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
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  4. Stefano DellaVigna & Ethan Kaplan, 2007. "The Fox News Effect: Media Bias and Voting," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1187-1234, 08.
  5. Claudia Goldin & Cecilia Rouse, 1997. "Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians," NBER Working Papers 5903, National Bureau of Economic Research, Inc.
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  7. Fershtman, C. & Gneezy, U., 2000. "Discrimination in a Segmented Society: an Experimental Approach," Papers 2000-9, Tel Aviv.
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  11. Orley Ashenfelter & Stephen Ciccarella & Howard J. Shatz, 2007. "French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?," NBER Working Papers 13258, National Bureau of Economic Research, Inc.
  12. Michaels, Guy & Zhi, Xiaojia, 2007. "Freedom Fries," CEPR Discussion Papers 6380, C.E.P.R. Discussion Papers.
  13. Larry Chavis & Phillip Leslie, 2006. "Consumer Boycotts: The Impact of the Iraq War on French Wine Sales in the U.S," NBER Working Papers 11981, National Bureau of Economic Research, Inc.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Freedom fries: How attitudes shape trade flows
    by jdingel in Trade diversion on 2010-08-05 15:20:42
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Moser, Petra, 2012. "Taste-based discrimination evidence from a shift in ethnic preferences after WWI," Explorations in Economic History, Elsevier, vol. 49(2), pages 167-188.
  2. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8m2hh491 is not listed on IDEAS
  3. Vasiliki Fouka & Joachim Voth, 2012. "Reprisals remembered: German-Greek conflict and car sales during the Euro crisis," Economics Working Papers 1394, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2013.
  4. Guy Michaels & Xiaojia Zhi, 2007. "Freedom fries," LSE Research Online Documents on Economics 51598, London School of Economics and Political Science, LSE Library.
  5. Sergey Mityakov & Heiwai Tang & Kevin K. Tsui, 2012. "International Politics and Import Diversification in the Second Wave of Globalization," Development Working Papers 342, Centro Studi Luca d\'Agliano, University of Milano, revised 13 Nov 2012.
  6. repec:hal:wpaper:halshs-00797006 is not listed on IDEAS
  7. Moses Shayo & Asaf Zussman, 2011. "Judicial Ingroup Bias in the Shadow of Terrorism," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1447-1484.
  8. Martin, Philippe & Mayer, Thierry & Thoenig, Mathias, 2010. "The geography of conflicts and free trade agreements," CEPR Discussion Papers 7740, C.E.P.R. Discussion Papers.
  9. Julia Cagé & Dorothée Rouzet, 2014. "Improving "National Brands": Reputation for Quality and Export Promotion Strategies," PSE Working Papers halshs-00797006, HAL.

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