Abstract

http://ssrn.com/abstract=2022214
 


 



The Impact of Cultural Aversion on Economic Exchange: Evidence from Shocks to Sino-Japanese Relations


Raymond J. Fisman


Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Yasushi Hamao


University of Southern California - Marshall School of Business - Finance and Business Economics Department

Yongxiang Wang


University of Southern California - Marshall School of Business

January 2013

AFA 2013 San Diego Meetings Paper
Marshall School of Business Working Paper No. FBE 4.13

Abstract:     
We study the impact of cultural aversion on international economic relations by analyzing market reaction to two major adverse shocks to Sino-Japanese relations in 2005 and 2010. Japanese companies with high China exposure decline disproportionately during each event window; Chinese companies with high Japanese exports similarly suffer relative declines. The effect on Japanese companies is concentrated in industries dominated by Chinese state-owned enterprises, where there is greater incentive and ability to intervene, while the negative impact on Chinese firms is primarily for consumer-focused companies. Our results suggest an important impact of cultural frictions on economic relations, and highlight that institutional context is important for understanding the mechanisms underlying this effect.

Number of Pages in PDF File: 35

Keywords: cultural bias, China-Japan relations, consumer sentiment, trade

JEL Classification: F13, F51, G14, G15

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Date posted: March 15, 2012 ; Last revised: February 2, 2014

Suggested Citation

Fisman, Raymond J. and Hamao, Yasushi and Wang, Yongxiang, The Impact of Cultural Aversion on Economic Exchange: Evidence from Shocks to Sino-Japanese Relations (January 2013). AFA 2013 San Diego Meetings Paper; Marshall School of Business Working Paper No. FBE 4.13. Available at SSRN: http://ssrn.com/abstract=2022214 or http://dx.doi.org/10.2139/ssrn.2022214

Contact Information

Raymond Fisman
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States
(212) 854-5553 (Phone)

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Yasushi Hamao
University of Southern California - Marshall School of Business - Finance and Business Economics Department ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
(213) 740-0822 (Phone)
Yongxiang Wang (Contact Author)
University of Southern California - Marshall School of Business ( email )
701 Exposition Blvd
Los Angeles, CA 90089
United States
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