We leverage features of the 2009 federal stimulus following the Great Recession. We examine two aspects of US state spending on investment incentives, a form of public spending that persists despite questionable economic benefits: (1) whether politicians prioritize incentives over spending on public services, and (2) which voters politicians seek to influence with incentives. Politicians' electoral motives to target public spending across voters has large implications for economic inequality and efficiency. We adopt a multi-disciplinary methodology (qualitative, secondary data, and experimental) to triangulate the findings and ensure generalizability of the results. We use experiments in studies 2 through 4 to show that, (a) self-enchantment mediates the effect of threats on favorability toward the brand, (b) advertisements that refocus attention on how the brand helps to cope with external threats mitigate the negative effects of internal threats for American brands (c) but not for non-American brands. We find that sales of American-sounding brands declined in counties that saw 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). 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 test our propositions through six studies that include secondary data analyses and lab experiments. We suggest self-enchantment as a mediator and the focus on external threat as a mitigator of the adverse effects of internal threats. Institutional threats to national identity, from within, i.e., internal threats, and from outside, i.e., external threats, affect sales of brands that are symbolic of a culture, either national or foreign.
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