Once an Enemy, Forever an Enemy? The Long-run Impact of Japanese Occupation of China on Trade and Investment

Professor Tao, Zhigang   (Principal Investigator (PI))

Dr Lu Yi   (Co-Investigator)

24

2013-02-01

198380

Once an Enemy, Forever an Enemy? The Long-run Impact of Japanese Occupation of China on Trade and Investment

Direct Investment, Japanese Occupation of China, Trade

Economics

Business Studies (B)

HKU 753312B

General Research Fund (GRF)

2012

Completed

1) We plan to employ the trade model of Helpman, Melitz and Rubinstein (2008), which is developed for dealing with selection bias and firm heterogeneity, to examine the impacts of Japanese occupation of China from 1937 to 1945 on current trade between the two countries. 2) We plan to use the discrete choice model developed by McFadden (1974) to examine the impacts of the Japanese occupation on FDI location choice made by the Japanese multinationals, with controls for the cost of production, market potential, agglomeration and economic institutions. 3) We will use other trade models, such as the traditional gravity model and PPMLE, to check the robustness of our findings.