The Impact Of Bilateral Relations On The Sales Of Transnational Products

In the research on how consumers make decisions to purchase foreign brand-name products,most of them focus on studying the effect of social psychology to buying intention or behavior.Besides,research on country of origin effect also support that the country where the brand come from will affect the consumers'purchasing.However,these research mainly discussed the relationship between individual attitudes and the purchasing of foreign products.Few research have explored the effect to sales in a foreign country from the perspective of bilateral relationships which will be influenced by military or economic conflict.Some other research disclosed the effect of conflict to sales in a foreign country based on descriptive methods.However,they did not tell the degree and the duration of the effect.Based on the VAR model,this paper did two parts of empirical study.The first part shows the effect of bilateral relationship to sales of Japanese cars in China mainland.It is found that when different measures are used to measure the Sino-Japan relationship and the sales,the results will be slightly different.To be specific,the effect of Sino-Japan relationship to the sales volume of Japanese cars will last for 5 months,and 12 months to sales share.The second part explore the effect of bilateral relationship to sales of Korean cars in China mainland.The results show that the effect of China-South Korea relationship to the sales volume of Japanese cars will last for 4 months,and over 12 months to sales share.It tells that China-South Korea relationship will have a larger effect on the car sales than Sino-Japan relationship.Based on the statistical results,we explain the difference of the performances of the two bilateral relationships.Lastly,we give some suggestions to the car manufacturers based on the analytical results.