Paying a Visit: The Dalai Lama Effect on International Trade
AbstractThe Chinese government frequently threatens that meetings between its trading partners’ officials and the Dalai Lama will be met with animosity and ultimately harm trade ties with China. We run a gravity model of exports to China from 159 partner countries between 1991 and 2008 to test to which extent bilateral tensions affect trade with autocratic China. In order to account for the potential endogeneity of meetings with the Dalai Lama, the number of Tibet Support Groups and the travel pattern of the Tibetan leader are used as instruments. Our empirical results support the idea that countries officially receiving the Dalai Lama at the highest political level are punished through a reduction of their exports to China. However, this ‘Dalai Lama Effect’ is only observed for the Hu Jintao era and not for earlier periods. Furthermore, we find that this effect is mainly driven by reduced exports of machinery and transport equipment and that it disappears two years after a meeting took place.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1103.
Date of creation: 26 Jan 2011
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International Trade; International Political Economy; Diplomatic Relations; Exports to China; Tibet; Dalai Lama;
Other versions of this item:
- Fuchs, Andreas & Klann, Nils-Hendrik, 2011. "Paying a visit: The Dalai Lama Effect on international trade," Center for European, Governance and Economic Development Research Discussion Papers 113, University of Goettingen, Department of Economics.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F51 - International Economics - - International Relations and International Political Economy - - - International Conflicts; Negotiations; Sanctions
- F59 - International Economics - - International Relations and International Political Economy - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-04 (All new papers)
- NEP-CWA-2011-06-04 (Central & Western Asia)
- NEP-POL-2011-06-04 (Positive Political Economics)
- NEP-TRA-2011-06-04 (Transition Economics)
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