摘要：Do firms choose inputs that minimize their cost of production, ignoring the
attitudes of their owners and employees? We examine this question using an
episode of worsening relations between the US and France: from February 2002 to
March 2003, France's favorability rating in US public opinion polls fell from 83
percent to 35 percent. Very negative attitudes towards France became common even
among college educated Americans with high levels of income, so they were likely
prevalent among managers. Using data from 1999-2005, we find that the worsening
relations reduced US imports from France by about 15 percent and US exports to
France by about 8 percent, compared to other Eurozone or OECD countries. This
decline was due in large part to a fall in France's share of the quantity of
inputs traded between the Eurozone and the US; this decline is significant even
after we control for changes in the product composition of trade flows. We also
find that the decline in trade w as accompanied by a similar drop in both
business trips and tourist visitations of US residents to France compared to
Western Europe. Taken together, our findings suggest that competition cannot
eliminate the effect of attitudes on firms' choice of inputs.
