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Country Reputation and Trade Policy Preferences - Using the News of the Election of Donald Trump as an Instrument

Tom Coupé and Oleksandr Shepotylo ()

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: Using quasi-experimental data, a survey that was held immediately before and after the November 8th, 2016 USA elections, we analyse the impact of reputation on trade policy preference and find that the unexpected election of Donald Trump as 45th president of the USA had a sizeable negative effect on the reputation of the USA in Europe, as measured by the expectations of EU citizens about the future evolution of the USA. But this negative reputational shock seems to have affected in a positive (though not always significant) way the support for future economic cooperation with the USA, as measured by the support of EU citizens for a free trade and investment treaty with the USA. This provides some support for the idea that reputation and formal institutions are substitutes.

Keywords: Reputation; Trade agreements; Trump; TTIP (search for similar items in EconPapers)
JEL-codes: F14 F55 C26 F50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-pol
Date: 2017-11-01
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