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Social movements and international business activities of firms

Longwei Tian (), Caleb H. Tse (), Xunyong Xiang (), Yuan Li () and Yigang Pan ()
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Longwei Tian: Tongji University
Caleb H. Tse: Nanyang Technological University
Xunyong Xiang: Jinan University
Yuan Li: Tongji University
Yigang Pan: York University

Journal of International Business Studies, 2021, vol. 52, issue 6, No 8, 1200-1214

Abstract: Abstract We examine social movements that arise from tensions between countries. From a neo-institutional view, we posit that social movements targeting another country generate powerful pressures on firms doing business with the targeted country. Although informal and non-governmental, these pressures may coerce firms into curtailing their business activities with the targeted country. Empirically, we analyzed the 2012 anti-Japanese social movement in China using a panel dataset of Chinese-listed firms from 2006 to 2017. Through a quasi-experimental design and difference-in-difference method, we found that this social movement was associated with a significant reduction in Chinese firms’ import from Japan, as well as export and FDI activities. Furthermore, we found that animosity against the targeted country and firms’ network connectivity exacerbated this effect, while firms’ political capital weakened it. We also found that the impact of this social movement existed for four years after the movement subsided. We contribute by showing that social movements have significant impacts on firms’ international business activities. Firms need to pay attention to informal pressures from social movements, and proactively adapt their cross-border business activities. In today’s digital era, opinions and sentiments can quickly snowball into massive collective forces in the virtual and actual worlds.

Keywords: social movements; social networks; informal pressures; DID; import (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41267-021-00424-3

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