The effects of bilateral attitudes on imports

Xiaohua Bao, Qing Liu, Larry Qiu and Daming Zhu

The World Economy, 2020, vol. 43, issue 2, 371-387

Abstract: Research based on the gravity model has shown that non‐economic factors affect international trade, and recent studies have shown that people's perception affects economic exchange. In this study, we explore the effects of attitudes on bilateral trade. Using survey data from the Pew Research Center's Global Attitudes Projects for 68 countries from 2002 to 2015, we find that a more favourable attitude of a country towards another country will increase the former country's imports from the latter. The result is robust to an endogeneity check, to different measures of attitudes and to different estimation methods. However, heterogeneity is observed across different types of goods and countries. The result holds for trade in intermediate and consumer goods, but the effects are not statistically significant for capital goods. The effects are statistically significant for bilateral trade between different country groups, except for high‐income countries' imports from non‐high‐income countries.

Date: 2020
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