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A Field Experiment on Business Opposition to the U.S.-China Trade War

Lindsay Dolan, Robert Kubinec, Daniel Nielson and Jack Zhang

No 435u9, SocArXiv from Center for Open Science

Abstract: Despite the harmful consequences of the U.S-China trade war, only a handful of firms took collective action to oppose it. To understand why, we implemented a field experiment in which we randomly provided detailed estimates of the costs of the trade war to U.S. company managers and measured their willingness to take actions either opposing or supporting the trade war. While overall our treatment counter-intuitively reduced opposition to the trade war, these effects were highly conditional on respondents' prior beliefs and the number of tariffs in their industry. The treatment increased opposition the most among subjects in industries with substantial tariffs who also thought the trade war was harmful. However, it decreased opposition among subjects who held neutral beliefs about the trade war. Finally, we find that a company’s political culture strongly predicts their political activity, suggesting political ideology and not just a company’s business interests shape corporate behavior.

Date: 2021-11-08
New Economics Papers: this item is included in nep-exp, nep-his and nep-int
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DOI: 10.31219/

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