The culture-promotion effect of multinationals on trade: the IKEA case

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