Research and Data
In the context of political tensions and rising economic interdependence between Japan and China, this book studies how Japanese multinational companies try to minimize damages and manage their own fear and uncertainty to sustain their business interests.
Using a qualitative approach, including over 150 interviews with Japanese and Chinese business and industry leaders, combined with statistical analysis of unique firm-level data, this book brings a ‘firm-level view’ to this crucial case of political conflict amid economic interdependence. It argues that there is wide variation in the degree of material damages Japanese multinationals sustain in the aftermath of political disputes, and how threatening they perceive the risks of political conflict to be. This book then goes on to evaluate the different responses to risk, from promoting Japan's culture through privately funded tactics and building common cause with the government, to diversifying a portion of assets abroad and even leaving China entirely.
Presenting a new angle on economic globalization in the Asia Pacific region, Risk Management Strategies of Japanese Companies in China will be useful to students and scholars of Asian politics, business, and economics as well as international political economy.
Japanese Journal of Political Science 20, no. 1 (2019): 2–20
This paper examines economic statecraft in the case of rare-earth elements, of which China controls over 90% of the world's current supply, and famously cut off exports to Japan during a territorial dispute in 2010. The rare-earth sanctions provide an opportunity to investigate claims of economic statecraft, power and interdependence, and the political implications of near-monopoly control of a resource critical for high-tech military, consumer, medical, and environmental industries. A vector error correction model statistically disentangles the effects of China's economic statecraft from their rare-earth quota and pricing policies. Prior to the sanctions, there was little international supply diversification. China's purported use of rare-earth elements was an economically costly diplomatic signal that demonstrated their potential leverage, but also had unintended consequences, as Japan moved to diversify rare-earth supplies and in doing so deepened diplomatic ties with China's neighbors. Economic statecraft served to heighten regional tensions and undermine the China's own end goals.
Replication data available here.
The Chinese Journal of International Politics, Volume 10, Issue 1, Spring 2017, Pages 95–129
This article addresses the strategies of multinational firms when faced with business risk arising from nationalist tensions and interstate conflict, focusing on the use of social engagement activities under the rubric of corporate social responsibility (CSR) that are targeted at the host country’s society at large. The adoption of this strategy is contingent on firms’ risk perception: firms with higher degrees of risk perception invest more resources in social strategies. Moreover, as firms are more exposed to risk over time, they shift their risk management strategies to ones that try to transform the nature of risk through private sector activities that resemble public diplomacy. The argument is tested quantitatively using unique data on the contributions of Japanese firms to social engagement activities in China, and qualitatively with descriptive statistics from surveys of CSR activities and elite interviews with state and business actors in China and Japan. The findings highlight new sociopolitical roles for multinational firms in international politics.
Journal of Asian Security and International Affairs December (2019) Vol 6 No. 3
Japan has a "cold politics, hot economics" relationship with both China and South Korea where political relations are tense and business overall flourishes. Despite the similarities, the political mobilization of consumers in response to Japanese business interests diverge: event, trade, and tourism data show that South Koreans are less likely to link economic interests with their political grievances with Japan compared to their Chinese counterparts even though the sources of the tensions are largely parallel. The divergence arises from different ways economic globalization has shaped national identity. In China, economic globalization has strengthened a nativist identity with strong anti-foreign components. Korean national identity has been formed by economic integration and interdependence. While strong national identity and anti-foreign elements exist, they are delinked from economic interests. Survey and event data from South Korea and China show that the variation in consumer politics is driven by attitudinal differences in the population that is strongly anti-Japanese. Social media data shows how citizens link or delink politics and business to mobilize for collective action, and provide qualitative evidence that how identities interact with globalization explain country-level variation.