French Automobiles and the Chinese Boycotts of 2008: Politics Really Does Affect Commerce

Canhui Hong, Hu Wei-Min (), James Prieger () and Zhu Dongming ()
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Hu Wei-Min: National Chengchi University
Zhu Dongming: Shanghai University of Finance and Economics

The B.E. Journal of Economic Analysis & Policy, 2011, vol. 11, issue 1, 38

Abstract: We explore the economic impact of boycotts of French automobiles in China during the time of the 2008 Beijing Olympics. Conditions were favorable for a boycott, enabling Chinese consumers to overcome the collective action problems that can prevent boycott success and other voluntary contributions to public goods. We use brand and model level data in a difference-in-difference specification to investigate the boycotts’ effects on sales. A robust pattern of large impacts emerges: sales of French automobile brands fell 25-33 percent or more. Consumers substituted mostly toward Chinese and other Asian cars. The sales of the French models did not experience similar relative sales declines in countries other than China—triple-difference estimates point toward even larger relative loss of market share in China. Our results provide evidence that commerce can be used as an effective political weapon.

Keywords: boycott; boycotting; voluntary contributions to public goods; economics of nationalism; free riding; consumer ethnocentrism; Chinese automobile industry; vehicles; cars (search for similar items in EconPapers)
Date: 2011
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DOI: 10.2202/1935-1682.2681

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