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Home » Artikel » Does Political Conflict Hurt Trade? Evidence from Consumer Boycotts

Does Political Conflict Hurt Trade? Evidence from Consumer Boycotts

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Written by Nisrina Firyal Nabila (BI’22)



The conflict of Israel-Hamas has people concerned about how people react towards the horrible recent events especially within happier countries about whether they care enough to empathize with Palestine. Boycott movements are happening left and right but does this really affect the economy? Sentiments are often one of the factors affecting the economy. International trade is often used as a political tool to strengthen inter-relations between countries. Alternatively it can also be used as a policy means in the case of conflict through sanctions, embargoes and boycotts.

Examples of international trade used as a special form of policy to give sanctions and punish or coerce specific behaviors are Japan by China throughout the 1930s in response to the Japanese invasion (Lauterpacht, 1933), the boycott of Israel by the Arab League after formation of the Jewish state in 1948, the worldwide boycott movement in protest of South Africa’s apartheid system in the late 1950s, and the consumer boycott against French products over nuclear testing in the 1990s, and the most recent event is a boycott movement currently held by people all over the world to boycott products that were identified supporting Israel. 

This research would answer people’s concern whether the boycott movement would work to affect the economy, spread awareness of what’s currently happening and how to help  stop the genocide in Palestine.



The author assesses the impact of boycotts on trade by employing a statistical method known as difference-in-differences models. This involves comparing the changes in logged exports from the boycotted country (Yj,t) to all its trading partners (j) over time (t) at a monthly frequency. The treatment status, whether a country is participating in the boycott or not, is used to distinguish between groups. Non-boycotting countries serve as the control group for comparison.

To enhance the analysis, the author includes standard gravity regressors, such as GDP and distance, provided by CEPII (The Centre d’Études Prospectives et d’Informations Internationales). Additionally, the model controls for a time trend and includes monthly fixed effects to account for any systematic variations over time. This comprehensive approach aims to capture and quantify the specific impact of the boycotts on trade relationships. The regression model used in this research is:



The countries being boycotted in this study—Denmark, Japan, the US, and Israel—are known for having diverse export economies. Taking Denmark as an example, the Muslim countries participating in the boycott only accounted for 2.6% of its total exports. This means that the overall impact of the boycott on Denmark’s export sector was limited. Despite significant disruptions in trade for some boycotting countries, Denmark’s exports only decreased by 0.4%. Similar patterns were observed for the US, where France, a boycotting country, made up 2.6% of its exports, resulting in a 0.4% decline in overall exports.

On the contrary, Japan faced a different scenario. The boycotting country, China, constituted nearly one-fifth of Japan’s total exports. However, the estimated effect of the boycott was relatively low, leading to an overall trade disruption of only 0.5%. One possible explanation for this is that most of Japan’s trade with China involves intermediate and capital goods. This suggests that for countries with a broad range of export goods and destinations, the intended punitive impact of a boycott might not have a significant effect. However, for more specialized countries, a boycott could potentially be more damaging. 



The analysis of case studies indicates that boycotts can significantly impact international trade during political conflicts, with estimated trade reductions ranging from 30% to 40%. While some countries readily engage in boycotts, others not only avoid such actions but may even increase their trade with the boycotted nation. Examining specific cases like the Danish-Muslim and Japanese-Chinese boycotts reveals common patterns, such as initial trade reductions reverting to previous levels over several months. Consumer goods are more affected than non-consumer goods, and countries with more open political systems tend to be more involved in boycotts.


Bdnaaah & the witness

Bdnaash and the witness are excellent websites to find products that are currently being boycotted. You can check whether the products you are currently using or going to buy are in the list of boycott products or not, and the reason why it is being boycotted.

We highly encourage all of you to continue give support to Palestine by stop buying products supporting Israel. We stand with Palestine.

#FreePalestine #CeasefireNOW