SSU Forum with Dr. Christina Davis

Date:June 27, 2013 10:00-12:00
Subject:“State Control and the Effects of Foreign Relations on Bilateral Trade”
Lecture:Dr. Christina Davis, Associate Professor, Princeton University

The Security Studies Unit (SSU) launched its first SSU Forum at the Ito International Research Center, University of Tokyo on June 27, 2013.

SSU was honored to have Dr. Christina Davis from Princeton University as our speaker. Her presentation titled “State Control and the Effects of Foreign Relations on Bilateral Trade” brought about many lively discussions among the participants, and a wide range of topics related to her talk were covered during the Q & A session.

Dr. Davis's research aimed to review if international politics affect the flow of international economy, and she tried to answer the question as to whether a powerful state tends to use trade as a means of rewarding or punishing other states. Although the discipline of WTO limits the capability of states to manipulate trade policy as a means of politics, Dr. Davis insisted that a government can link economic and political objectives by using sectors regulated by the government.

Specifically, Dr. Davis showed that a government can manipulate bilateral trades on a corporation level, by controlling a company nationalizing it. A state-owned company places its political aim as its premier objective, where strong relationships with the state leaders are seen. China (China's boycott against Norway salmon) and India were cited as examples.

Dr. Davis also collected respective data based on different forms of company ownership and sector types engaged in bilateral trades, and measured bilateral political relationships based on states' voting code at the United Nations and at political events in order to estimate effects on political relationships on export and import flows. Moreover, Dr. Davis focused on negative political events. Her statistics showed that a negative political event had a strong effect on reducing import regarding a state-owned company in China and India. These political events partially affected the import of a state-owned company in India. The outcome of this report supports the hypothesis that a state-owned company is more likely to be affected by political relationship than a private-owned company.