Impact of the South China Sea arbitration case on the economic relations between China and the Philippines:An empirical study based on the synthetic control method
Both trade and investment are important economic linkages between countries.Geo-political conflicts may have great impact on economic linkages,while little is known how trade and investment respond to geopolitical conflict differently.Based on monthly data of January 2012-December 2013 of China's import and annual data of 2003-2019 China's outward direct investment(OFDI),this paper uses the synthetic control method to investigate the impact of the South China Sea(SCS)arbitration case on China's import from the Philippines and China's OFDI to the Philippines.The empirical results show that the SCS arbitration case did not have signifi-cant effect on China's import from the Philippines,but it decreased China's OFDI to the Philip-pines significantly since 2013.The results passed several robust checks.The results implicate that there is no evidence that China responded to the SCS arbitration case with trade sanctions.However,in terms of rising geopolitical uncertainty caused by the SCS arbitration case,China's firms decreased OFDI to the Philippines significantly,which may further impact economic devel-opment of the Philippines caused by the SCS arbitration case initiated by itself.
geopolitical disputeSouth China Sea Arbitration Caseimportoutward foreign direct investmentsynthetic control method
NETL
NSTL
万方数据
