Agent Orange: Trump, Soft Power, and Exports

38 Pages Posted: 17 Sep 2018  

Andrew Kenan Rose

University of California - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: August 2018

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 about 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, since; 'soft power' promotes exports. The Gallup effect is statistically and economically significant; a one percent increase in leadership approval raises exports by around .66 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 (Obama's last year) and 2017 (Trump's first year) lowered American exports by at least .2% or >$3 billion.

Keywords: approval, data, empirical, Gallup, Gravity, international, leadership, panel, positive

JEL Classification: F14, F59

Suggested Citation

Rose, Andrew Kenan, Agent Orange: Trump, Soft Power, and Exports (August 2018). CEPR Discussion Paper No. DP13139. Available at SSRN: https://ssrn.com/abstract=3244512

Andrew Kenan Rose (Contact Author)

University of California - Haas School of Business ( email )

Berkeley, CA 94720
United States
510-642-6609 (Phone)
510-642-4700 (Fax)

HOME PAGE: http://faculty.haas.berkeley.edu/arose

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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