Spillovers of Political Shocks to Sino-Japanese Relations in Annual Reports of the Japan-China Economic Association (1981-2015)

Abstract

Political shocks to Sino-Japanese relations resulting from the textbook discussion in 2005 and the Senkaku Islands dispute in 2010 and 2012 have caused direct and indirect spillovers onto economic relations, such as property damage, boycotts or canceled business events. In most cases, both direct and indirect effects were detrimental to Japanese companies in China. This experience raises the question whether direct or indirect spillovers caused by shocks, or conflicting political relations in general, play a role for Japanese actors doing business with China.