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Soft power and Germany's exports - First evidence from transaction data

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  • Joachim Wagner

    (Leuphana University Lueneburg)

Abstract

A recent literature reports evidence showing that the rate of approval of the job performance of the leadership of a home country among the people of a foreign country is important for the exports from the home country to this country. These exports are larger, ceteris paribus, if this rate of approval is higher among the importers. This is known as the soft power effect. These results are based on a standard gravity model that is estimated with aggregate data for trade between the countries. While this approach takes care of differences in the characteristics of the destination countries of exports differences in the characteristics of the exporting firms and differences in the characteristics of the traded goods are ignored. Using transaction data for German exports of goods this paper shows that the soft power effect exists when differences in the destination countries and differences in the exporting firms and differences in the traded goods are controlled for.

Suggested Citation

  • Joachim Wagner, 2020. "Soft power and Germany's exports - First evidence from transaction data," Economics Bulletin, AccessEcon, vol. 40(1), pages 624-631.
    • Handle: RePEc:ebl:ecbull:eb-19-01043
    as

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    References listed on IDEAS

    as
    1. Andrew K. Rose, 2016. "Like Me, Buy Me: The Effect of Soft Power on Exports," Economics and Politics, Wiley Blackwell, vol. 28(2), pages 216-232, July.
    2. Rose, Andrew, 2018. "Agent Orange: Trump, Soft Power, and Exports," CEPR Discussion Papers 13139, C.E.P.R. Discussion Papers.
    3. Laurent Didier, 2019. "Soft power and exporters behavior in international trade," Economics Bulletin, AccessEcon, vol. 39(4), pages 2595-2614.
    4. Wagner Joachim, 2020. "Transaction Data for Germany’s Exports and Imports of Goods," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(4), pages 537-542, August.
    5. Andrew K. Rose, 2019. "Soft power and exports," Review of International Economics, Wiley Blackwell, vol. 27(5), pages 1573-1590, November.
    6. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LLC, number musr, July.
    7. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
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    JEL classification:

    • F1 - International Economics - - Trade

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