Boycott or Buycott?: Internal Politics and Consumer Choices

Josep M. Raya and Xavier Cuadras Morató
Authors registered in the RePEc Author Service: Xavier Cuadras-Morató

No 770, Working Papers from Barcelona School of Economics

Abstract: Do political tensions affect economic relations? In particular, does politics significantly affect consumer choices? Firms are often threatened by consumer boycotts that pretend to modify their business strategies and behavior. Sometimes these are caused by general political conflicts. The main objective of the paper is to study the consequences of political conflicts between Spain and Catalonia (a region of Spain) and the subsequent boycott calls on sales of Catalan sparkling wine (cava) in the aggregated Spanish market and also in different regions of the country. We use data from sales of sparkling wine in supermarkets and similar outlets. To determine with precision the boycott period we use data on the number of news about the issue that appeared in the main national Spanish daily newspapers. Although we present some preliminary evidence that the boycott calls affected the market share of Catalan cava in Spain, the results of our main econometric exercise indicate that, once we control for the time trends of the different varieties of sparkling wine, the boycott effects cease to be significant in the aggregate Spanish market. This does not necessarily mean that the boycott calls did not have any significant impact, because we actually find that the effects are very different in each regional market. As a matter of fact, our results indicate that the insignificant impact of the boycott calls at the Spanish aggregate level is a consequence of the combination of a negative impact of the boycott on sales of Catalan cava in some regions and the opposite effect in the Catalan market.

Keywords: political economy; Consumer boycott; wine sales (search for similar items in EconPapers)
JEL-codes: D74 E40 F14 J64 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-eur, nep-mac and nep-pol
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Related works:
Journal Article: Boycott or Buycott?: Internal Politics and Consumer Choices (2016)
Working Paper: Boycott or buycott?: Internal politics and consumer choices (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:770

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