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Joachim Wagner
''Soft power and Germany's exports - First evidence from transaction data''
( 2020, Vol. 40 No.1 )
A recent literature reports evidence showing that the rate of approval of the job performance of the leadership of a home country among the people of a foreign country is important for the exports from the home country to this country. These exports are larger, ceteris paribus, if this rate of approval is higher among the importers. This is known as the soft power effect. These results are based on a standard gravity model that is estimated with aggregate data for trade between the countries. While this approach takes care of differences in the characteristics of the destination countries of exports differences in the characteristics of the exporting firms and differences in the characteristics of the traded goods are ignored. Using transaction data for German exports of goods this paper shows that the soft power effect exists when differences in the destination countries and differences in the exporting firms and differences in the traded goods are controlled for.
Keywords: Exports, Transaction data, Soft Power, Germany, Gallup World Poll
JEL: F1 - Trade: General
Manuscript Received : Nov 26 2019 Manuscript Accepted : Feb 29 2020

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