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French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?

Author

Listed:
  • Orley Ashenfelter
  • Stephen Ciccarella
  • Howard J. Shatz

Abstract

In early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy.

Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberwo:13258
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    References listed on IDEAS

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    1. Bentzen, Jan & Smith, Valdemar, 2001. "Did the French Nuclear Tests under the Muroroa Atoll Affect the Export of French Wine to Denmark?," Working Papers 01-9, University of Aarhus, Aarhus School of Business, Department of Economics.
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    Cited by:

    1. 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.
    2. Guy Michaels & Xiaojia Zhi, 2010. "Freedom Fries," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 256-281, July.
    3. Zijun Luo & Yonghong Zhou, 2016. "Gainers and Losers of Political Instability: Evidence from the Anti-Japanese Demonstration in China," Working Papers 1608, Sam Houston State University, Department of Economics and International Business.
    4. Sofronis Clerides & Peter Davis & Antonis Michis, 2010. "The Impact of the Iraq War on US Consumer Goods Sales in Arab Countries," Working Paper series 25_10, Rimini Centre for Economic Analysis.
    5. Cuadras-Morató Xavier & Raya Josep Maria, 2016. "Boycott or Buycott?: Internal Politics and Consumer Choices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 185-218, January.
    6. Wang, Zhongmin & Lee, Alvin & Polonsky, Michael, 2015. "Egregiousness and Boycott Intensity: Evidence from the BP Deepwater Horizon Oil Spill," Discussion Papers dp-15-06, Resources For the Future.
    7. Sofronis Clerides & Peter Davis & Antonis Michis, 2015. "National Sentiment and Consumer Choice: The Iraq War and Sales of US Products in Arab Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 829-851, July.
    8. Heilmann, Kilian, 2016. "Does political conflict hurt trade? Evidence from consumer boycotts," Journal of International Economics, Elsevier, vol. 99(C), pages 179-191.
    9. Raymond Fisman & Yasushi Hamao & Yongxiang Wang, 2014. "Nationalism and Economic Exchange: Evidence from Shocks to Sino-Japanese Relations," Review of Financial Studies, Society for Financial Studies, vol. 27(9), pages 2626-2660.
    10. Hong Canhui & Hu Wei-Min & Prieger James E. & Zhu Dongming, 2011. "French Automobiles and the Chinese Boycotts of 2008: Politics Really Does Affect Commerce," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-38, May.
    11. Xiaohuan Lan & Ben G. Li, 2015. "The Economics of Nationalism," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 294-325, May.
    12. Hendel, Igal E & Lach, Saul & Spiegel, Yossi, 2015. "Consumers' Activism: the Facebook boycott of Cottage Cheese," CEPR Discussion Papers 10460, C.E.P.R. Discussion Papers.
    13. Friberg, Richard & Paterson, Robert W. & Richardson, Andrew D., 2011. "Why is there a Home Bias? A Case Study of Wine," Journal of Wine Economics, Cambridge University Press, vol. 6(01), pages 37-66, January.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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