Thursday, 7 March 2013

French roast

Here is a paper I wish I had written... this time by two Indian scholars (Pandya and
Venkatesan) working in the US, about the effect of the Iraq war squabbles between France and the US on sales of French-sounding consumer goods. Here is the abstract:

International conflicts frequently prompt boycott calls but scholars dispute whether consumers participate. Theories of conflict and economic interdependence fail to account for marketing that distorts consumers’ perception of product origin. For the 2003 US-France dispute over the Iraq invasion we analyze weekly supermarket sales data from 2500 supermarkets for 8729 grocery brands. Our difference-in-difference estimates show that in weeks with more intense boycott calls sales of French-sounding brands declined. For just the week of March 16 the boycott cost over forty-four million dollars in lost sales. This finding is robust to controls for pro-French sentiment, gas price fluctuations, and possible xenophobic responses. We also find no change in sales of French-owned US-trademarked brands. This study highlights new dimensions of economic integration along which conflict’s effects manifest and contributes precise tests of underlying causal mechanisms. More generally we demonstrate the untapped potential of consumer behavior as a metric of political sentiment.

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