Do political tensions take a toll? The effect of the Sino-Japan relationship on sales of Japanese-brand cars in China

While much has been written about how consumers make decisions to purchase foreign brand-name products, relatively less is known about the effect of international relations on the market performance of the products of one country in another with which it has conflicts. Motivated by this gap in the literature, we test the effect of the relationship between China and Japan on automobile sales, and show that the effect of Sino-Japan relationship on the market performance of Japanese-brand cars in China is statistically significant, and that this significant effect lasts for 3 months at maximum. Asian Business & Management (2014) 13, 359–378. doi:10.1057/abm.2014.12; published online 27 August 2014