Original scientific paper
https://doi.org/10.1080/1331677X.2019.1694559
Does political conflict affect bilateral trade or vice versa? Evidence from Sino-U.S. relations
Chi-Wei Su
Yu Song
Ran Tao
Lin-Na Hao
Abstract
This paper investigates the dynamic causal relationship between
Sino-U.S. political conflict and bilateral trade using a time-varying
(bootstrap) Granger full-sample causality test and sub-sample rolling
window estimation. The result indicates that Sino-U.S. political conflict
and bilateral trade may interact in various ways. Bilateral trade
has both positive and negative effects on political conflict in several
sub-phases, and in turn, political conflict has the same impacts on
bilateral trade. In general, the relationship between Sino-U.S. political
conflict and bilateral trade is not always consistent with the
model of Polachek, which states bilateral trade has significantly
reduced political conflict. In the face of a severe economic situation,
China and the U.S. government should strengthen trade cooperation
and seek common ground of economic interests in order to
expand the improvement of political relations.
Keywords
Political conflict; bilateral trade; bootstrap rolling windows; Sino-U.S. relations
Hrčak ID:
254707
URI
Publication date:
9.2.2021.
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