Paper

Political Events, National Bias and International Trade Evidence from Sino-Japanese Trade


Authors:
Hongxin Yao; Dongming Zhu; Yuri Yu
Abstract
In the literature of national bias in the international trade, not only is the consumer bias decided by the product characteristics, but also it is influenced by product origin. Theoretically, consumers’ purchasing incentives for foreign products may be weakened due to political conflicts with their trade partners; on the contrary, the purchasing motivation can be strengthened with the improvement of political relations between both countries. In this paper, Sino-Japanese political events have been divided into two major categories, namely, political conflicts and national leader meetings. Between them, political events include the border conflict events (the Diaoyu Islands, the East China Sea oil and gas fields) and historical events (the Nanjing massacre, comfort women, the Prime Minister's visit to the Yasukuni Shrine and Japanese history textbook controversy). Based on Chinese and Japanese industry data, the paper examines, in the dynamic model with control groups, whether the political events can change consumers’ national biases, thus affect China’s industry import volume from Japan. The conclusions of this paper show that Sino-Japanese political conflicts, historical events in particular, may generate significant negative influence on the import volume from Japan, in wood, beverage, fruits and vegetables and plant fiber industries. But the state meeting may help to enhance the sales of Japanese imports like tobacco. However, compared with the local effect factors such as tariffs, political events, through changing the national bias, exert a smaller influence on the international trade.
Keywords
Political Events, National Bias, International Trade
StartPage
46
EndPage
67
Doi
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