Michaels, Guy; Zhi, Xiaojia - In: American Economic Journal: Applied Economics 2 (2010) 3, pp. 256-81
Do firms always choose the cheapest suitable inputs, or can group attitudes affect their choices? To investigate this question, we examine the deterioration of relations between the United States and France from 2002-2003, when France's favorability rating in the US fell by 48 percentage points....