Economic Value of Country Image: Evidence from International Trade and Implications for China

This paper examines the economic value of country image from the perspective of export prices through matching the CEPII export price data with the British Broadcasting Company country image data from 2006 to 2013. The estimation results show that positive country image has an “elevating” effect and negative country image has a “depressing” effect on export prices. The results also indicate that the lower the level of economic development of an export or import country, the stronger the export price effect of country image. As distances between export countries and trading partners increase, the elevating effect of positive country image on export prices becomes weaker. However, the depressing effect of negative country image does not become weaker over greater distances. We find that export prices are depressed by negative country image to a greater degree for China than for other countries. Therefore, it is necessary for China to prevent the occurrence of incidents detrimental to country image.