Interaction between trade, conflict and cooperation: The case of Japan and China

    Research output: Contribution to journalArticle

    Abstract

    The complex interaction between trade and politics is analysed for the Japan-China relationship using Granger causality tests. The purpose is to determine the presence and direction of causation between trade and political events, both positive and negative, and to gauge an idea of the lag length of causality. Trade is growing quickly between Japan and China despite long standing political distance between the two countries. Results show that the economic relationship underpins and constrains the political relationship between Japan and China while an increase in positive political news and a decrease in negative political news promote trade to some degree.
    Original languageEnglish
    Pages (from-to)1-35
    JournalAsia Pacific Economic Papers
    Volume386
    DOIs
    Publication statusPublished - 2010

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