CEPII, Recherche et Expertise sur l'economie mondiale
The Culture-Promotion Effect of Multinationals on Trade: the IKEA case


Dylan Bourny
Daniel Mirza
Camelia Turcu

 Points clés :
  • This paper focuses on the idea that multinationals' have the ability to promote their home countries' products on foreign markets.
  • We use IKEA as an ideal case study to test our hypothesis.
  • We build an original dataset on IKEA presence in foreign markets between 1995 and 2015.
  • The setting of a new IKEA store in a destination increases trade flows from Sweden by around 2% for products that resemble IKEA's.
  • This result is driven primarily by the products that are being identified to encompass a high-cultural content in IKEA advertisements catalogues.

 Résumé :
In this paper, we investigate how some MNEs which spread their home culture over time and space to the rest of the world are affecting, in turn, trade flows from home. By selling products embodying cultural information related to their country of origin, those MNEs embrace the role of ambassadors of their home country. We argue that IKEA offers an ideal case to identify a multinational's culture-promotion effect on trade. We build a dataset on IKEA's presence in foreign markets between 1995 and 2015 and merge it with disaggregated product level trade between pairs of countries. We find solid evidence of an externality linked to IKEA: a setting of an IKEA new store in a destination increases trade flows by around 2% from Sweden for products that resemble to what the multinational offers (despite being completely unrelated to that multinational). This result is driven primarily by the products identified to encompass a high-cultural content. Other robustness checks and tests seem to be very much consistent with the hypothesis of IKEA promoting the Swedish culture to the world.


 Mots-clés : Export Promotion | Multinationals | Trade

 JEL : E22, F12, F22
CEPII Working Paper
N°2022-06, July 2022

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 Domaines d'expertise

Commerce & Mondialisation
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