Working Paper

Institutional threats to national identity from within—internal threats—and from outside—external threats—affect sales of brands symbolic of a culture, either national or foreign. We suggest national identity as a mediator and the focus of brand advertisements as a mitigator of the adverse effects of threats. We test our propositions through four studies that include secondary data analyses and lab experiments. In study 1, we analyze weekly supermarket scanner data, encompassing sales of over 8,000 brands across more than 1,100 US stores in 2004. We find that sales of American-sounding brands declined in counties with higher coverage of the Abu Ghraib torture scandal (internal threat) and sales of non-American sounding brands decreased in counties with more war causalities (external threat). We use lab experiments in studies 2 through 4 to show that, (a) national identity is a mediator, (b) advertisements highlighting the quality of the brand mitigates the negative effects of internal threats for American sounding brands, and (c) advertisements highlighting brands’ activities that help American causes mitigates the negative effects of external threats for non-American sounding brands. Our research highlights the risks brands face from national associations and provides mitigation strategies.

Helms B, Pandya S, Sekhri S. Bartering Bureaucrats: FDI Weakens Governance. Working Paper.

How does global economic integration shape governance in developing countries? We analyze the effects of foreign direct investment (FDI) on  bureaucracies, a critical linchpin of governance largely overlooked in existing research. We overcome the endogeneity between integration and governance by leveraging India's sudden and extensive 2005 FDI liberalization. Politicians' relocation of bureaucrats provides a revealed, real-time measure of politicians' motives vis-a-vis foreign firms. Using multiple identification strategies, we show that state politicians relocate loyal but less competent Indian Administrative Service bureaucrats to FDI-exposed districts. Turnover is pronounced in more corrupt states and in districts with FDI originating from more corrupt countries. Politicians who represent FDI-exposed constituencies see an average 24 percent increase in their personal assets, but only when their party belongs to the state's ruling coalition government. Consistent with worse governance, survey respondents in exposed districts express falling confidence in state politicians. We rule out several threats to inference and plausible alternative mechanisms. Our findings highlight politicians' manipulation of the bureaucracy as a novel mechanism through economic integration undermines governance.

Helms B, Pandya S, Venkatesan R. War on Aisle 5: Casualties, National Identity, and Consumer Behavior. Working Paper.

How does national identity shape domestic reactions to international politics? Although prominent debates in International Relations turn on this question, scholars lack empirical approaches to establish the casual effects of national identity on behavior. We introduce an approach that leverages strong similarities between political and consumer behavior. Sales of American supermarket brands is a time-varying measure of national identity's effects on choice behavior. We find that when American soldiers died in Iraq, the market share of American brands grew in their US hometowns. Casualties produce feelings of threat. Share growth was stronger in supermarkets frequented by Republicans, who are more prone to embrace national identity in response to threat. Partisan cues and animosity towards erstwhile allies do not drive our findings. Our study strengthens theoretical microfoundations by establishing, with high external validity, that national identity has a causal effect on the decisions people make in response to international politics.

Li T, Pandya S, Sekhri S. Repelling Rape: FDI Empowers Women. Working Paper.

Prevailing economic development strategies emphasize women’s empowerment through earned income. These strategies fail to address patriarchal norms that fuel violent male backlash to women’s empowerment. We show that foreign direct investment (FDI) both increases women’s earned income and introduces gender equality norms, producing women’s empowerment resilient to backlash. We leverage India's 2005 FDI liberalization to identify FDI's causal effect on empowerment and rape, a manifestation of backlash. In FDI-exposed districts, rape declined, women's relative wages doubled, and working women voiced greater support for women's empowerment. FDI strengthened women's political participation and household bargaining leverage in ways that increase working women’s safety. Gender equality norms are essential; FDI from low gender equality countries - which raises income without introducing gender equality norms - increases rape. We rule out several non-empowerment mechanisms. We show that FDI is a powerful conduit for gender equality norms into cultures otherwise hostile to women’s empowerment.

What improves women' s status and reduces rape? Washington Post/Monkey Cage April 30, 2020.