Local Global Watchdogs: Trade, Sourcing and the Internationalization of Social Activism

Thierry Verdier, Pamina Koenig, Sebastian Krautheim and Löhnert, Claudius

No 15878, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: International NGO campaigns criticizing firms for infringements along their internationalized value chains are a salient feature of economic globalization. We argue that understanding the international patterns of NGO campaigns requires accounting for the geography of their targets’ economic activities. We propose a model of global sourcing and international trade in which heterogeneous NGOs campaign against heterogeneous firms in response to infringements along their international value chains. We find that campaigns are determined by a triadic gravity equation where all three bilateral trade costs matter for NGO campaigns. Importantly, the sourcing trade costs between the supplier and the firm, which do not involve the country of the NGO, shape the patterns of NGO campaigns through their effect on the sourcing decision of firms. We use recently available data on NGO campaigns to estimate our triadic gravity equation and find strong support for this prediction.

Keywords: International trade; International sourcing; Gravity; Ngos; Campaigns; Social activism (search for similar items in EconPapers)
JEL-codes: F12 F60 F63 L31 O35 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-int and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Local Global Watchdogs: Trade, Sourcing and the Internationalization of Social Activism (2021)
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