Nationalism and Economic Exchange: Evidence from Shocks to Sino-Japanese Relations

Raymond Fisman, Yasushi Hamao and Yongxiang Wang

No 20089, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the impact of nationalism and interstate frictions on international economic relations by analyzing market reaction to adverse shocks to Sino-Japanese relations in 2005 and 2010. Japanese companies with high China exposure suffer relative declines during each event window; a symmetric effect is observed for Chinese companies with high Japanese exposure. The effect on Japanese companies is more pronounced for those operating in industries dominated by Chinese state-owned enterprises, while firms with high Chinese employment experience lower declines. These results emphasize the role of countries' economic and political institutions in mediating the impact of interstate frictions on firm-level outcomes.

JEL-codes: F13 F51 G14 G15 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-cna, nep-pol and nep-tra
Note: CF DEV ITI POL
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Citations: View citations in EconPapers (72)

Published as Raymond Fisman & Yasushi Hamao & Yongxiang Wang, 2014. "Nationalism and Economic Exchange: Evidence from Shocks to Sino-Japanese Relations," Review of Financial Studies, Society for Financial Studies, vol. 27(9), pages 2626-2660.

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