Trade effects of political conflicts

Shan Wan, Zeng Lian and Yue Chen

Applied Economics Letters, 2020, vol. 27, issue 11, 925-929

Abstract: We review China–Korea conflict that broke out in July 2016 and examine the effects on China’s imports from Korea. We find that the trade deterioration effects vary over the stages of the conflicts China’s imports from Korea were not significantly affected in the first few months after July 2016. Trade deterioration effects manifested themselves after February 2017 and the estimates show that China’s imports from Korea reduced by 15%. Our results support the viewpoint that, in order to influence the political position of trading partners, the government may take advantage of trade ties.

Date: 2020
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DOI: 10.1080/13504851.2019.1646864

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