Longwei Tian, Caleb H. Tse , Xunyong Xiang , Yuan Li and Yigang Pan

Journal of International Business Studies, 52:1200-1214.

Recommend Reason

In this study, we examine social movements that arise from tensions between countries. From a neo-institutional view, we posit that social movements targeting another country generate powerful pressures on firms doing business with the targeted country. Though informal and non-governmental, these pressures may coerce firms into curtailing their business activities with the targeted country. Empirically, we analyzed the 2012 anti-Japanese social movement in China using a panel data set of Chinese-listed firms from 2006 to 2017.

About the Authors 

Longwei Tian, School of Economics and Management, Tongji University

Caleb H. Tse, Nanyang Technological University.

Xunyong Xiang, Jinan University

Yuan Li, School of Economics and Management, Tongji University

Yigang Pan, York University

Keywords

Social movements, social networks, informal pressures, DID, import

Brief Introduction

Through a quasi-experimental design and difference-in-difference (DID) method, we found that this social movement was associated with a significant reduction in Chinese firms’ imports from Japan, as well as export and FDI activities. Furthermore, we found that animosity against the targeted country and firms’ network connectivity exacerbated this effect, while firms’ political capital weakened it. We also found that the impact of this social movement existed four years after the movement subsided. We contribute by showing that social movements have significant impacts on firms’ international business activities. Firms need to pay attention to informal pressures from social movements and proactively adapt their cross-border business activities. In today’s digital era, opinions and sentiments can quickly snowball into massive collective forces in the virtual and actual world.