Country Image and International Trade
SMU Economics & Statistics Working Paper No. 29-2012
49 Pages Posted: 23 Jul 2012
Date Written: July 2012
We study the impact of country image on international trade flows. We find that a one percentage point increase in the positive response ratio -- the proportion of people in the importing country who view the exporting country positively -- is associated with at least a one percent increase in the aggregate trade flow. By disaggregating trade flows by the type of goods, we also find that both homogeneous and differentiated goods are positively affected by better country image and that the impact of country image tends to be larger when more substitutes are available in the international market.
Keywords: boycott, trust, country of origin, gravity model, multilateral resistance
JEL Classification: F10, C33
Suggested Citation: Suggested Citation