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Agent Orange: Trump, Soft Power, and Exports

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  • Andrew K. Rose

Abstract

A country’s exports rise when its leadership is approved by other countries. I show this using a standard gravity model of bilateral exports, a panel of data from 2006 through 2017, and an annual Gallup survey which asks people in up to 157 countries whether they approve of the job performance of the leadership of China, Germany, Russia, the United Kingdom and the United States. Holding other things constant, a country’s exports are higher if its leadership is approved by the importer; ‘soft power’ promotes exports. The soft power effect is statistically and economically significant; a one percent increase in leadership approval raises exports by around two-thirds of a percent. This effect is reasonably robust, and different measures of soft power deliver similar results. I conservatively estimate that the >20 percentage point decline in foreign approval of American leadership between 2016 (the final year of Obama’s presidency) and 2017 (Trump’s first year) lowered American exports by at least $3 billion.

Suggested Citation

  • Andrew K. Rose, 2019. "Agent Orange: Trump, Soft Power, and Exports," NBER Working Papers 25439, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25439
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    1. Glick, Reuven & Rose, Andrew K, 2015. "Currency Unions and Trade: A Post-EMU Mea Culpa," CEPR Discussion Papers 10615, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Jianhong Qi & Kam Ki Tang & Da Yin & Yong Zhao, 2020. "Remaking China’s Global Image with the Belt and Road Initiative: Is the Jury Out?," Discussion Papers Series 635, School of Economics, University of Queensland, Australia.
    2. Asmus, Gerda & Eichenauer, Vera & Fuchs, Andreas & Parks, Bradley, 2021. "Does India use development finance to compete with China? A subnational analysis," Kiel Working Papers 2189, Kiel Institute for the World Economy (IfW).
    3. Laurent Didier, 2019. "Soft power and exporters behavior in international trade," Economics Bulletin, AccessEcon, vol. 39(4), pages 2595-2614.
    4. Joachim Wagner, 2020. "Soft power and Germany's exports - First evidence from transaction data," Economics Bulletin, AccessEcon, vol. 40(1), pages 624-631.
    5. Eichenauer, Vera Z. & Fuchs, Andreas & Brückner, Lutz, 2021. "The effects of trade, aid, and investment on China's image in Latin America," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 483-498.
    6. Ricardo Gonçalves & Peyman Khezr & Flavio Menezes, 2020. "Partial Vertical Ownership with Asymmetric Information," Discussion Papers Series 634, School of Economics, University of Queensland, Australia.

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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