Local global watchdogs: Trade, sourcing and the internationalization of social activism

Pamina Koenig (), Sebastian Krautheim, Claudius Löhnert and Thierry Verdier ()
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Pamina Koenig: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Sebastian Krautheim: University of Passau, CESifo - CESifo
Claudius Löhnert: University of Passau
Thierry Verdier: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, CESifo - CESifo, PUC-Rio - Pontifícia Universidade Católica do Rio de Janeiro [Brasil] = Pontifical Catholic University of Rio de Janeiro [Brazil] = Université catholique pontificale de Rio de Janeiro [Brésil], CEPR - Center for Economic Policy Research

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Abstract: 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 value chains. We find that campaigns are determined by a triadic gravity equation involving the country of the NGO, the country of the firm as well as the sourcing country. Importantly, independent of the location of the NGO, trade costs between the supplier and the firm shape the patterns of NGO campaigns. We use recently available data to estimate our triadic gravity equation at the NGO level and find strong support for this prediction as well as for other predictions specific to our modeling approach.

Date: 2025-09
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Published in Journal of International Economics, 2025, 157, ⟨10.1016/j.jinteco.2025.104116⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-05162930

DOI: 10.1016/j.jinteco.2025.104116

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