Do political tensions take a toll? The effect of the Sino-Japan relationship on sales of Japanese-brand cars in China

Abstract

While much has been written about how consumers make decisions to purchase foreign brand-name products, relatively less is known about the effect of international relations on the market performance of the products of one country in another with which it has conflicts. Motivated by this gap in the literature, we test the effect of the relationship between China and Japan on automobile sales, and show that the effect of Sino-Japan relationship on the market performance of Japanese-brand cars in China is statistically significant, and that this significant effect lasts for 3 months at maximum.

Emotional Encounters of Chinese Tourists to Japan

“…Likewise, Japanese multinationals are less likely to invest in Chinese regions that suffered greater numbers of casualities during the Japanese invasion. At the consumer level, various provoking events associated with Sino-Japanese relations from 2004 to 2012 have significantly hampered the sales of the six major brands of Japanese vehicles, with effects lasting for up to three months every time (Yang & Tang, 2014). Yet, SinoJapanese cooperative projects involving common interests have continued to thrive (Takeuchi, 2014), particularly in the fields of environment, health, and trade (Dreyer, 2001).…”

Multilateral political effects on outbound tourism

“…In addition to the trickle-down nationalism fed by the Chinese government, bubble-up nationalism gained increasing popularity in China thanks to the explosive development of social media (Gao, 2012). The territorial dispute between China and Japan over the ownership of Diaoyu/Senkaku island is always accompanied by nationwide waves of strong anti-Japan sentiment and boycotts of Japanese products in China (Fisman et al, 2014;Yang & Tang, 2014), including tourism to Japan (Lin et al, 2017;Kim et al, 2016). Nationalists, however, differ in degree.…”

The Influence of Contemporary Negative Political Relations on Ethnic Dining Choices

“…For example, the dispute between China and Japan on the issue of sovereignty over the Diaoyu (or Senkaku) Islands in April 2012 have severely affected the sales of Japanese companies operating in China. By September 2012, the sales volumes of three major Japanese auto companies declined by 41% as compared with the previous year (Y. Yang & Tang, 2014).…”

“…The international business literature demonstrates that conflicting political relations affect the consumption of products that have an “unfriendly” national identity (Y. Yang & Tang, 2014).…”