An Empirical Study On The Influence Of Korean Public Opinion On Korea-Japan Trade

The relationship between South Korea and Japan has had ups and downs in the 21st century.Due to the historical and territorial disputes with Japan,the negative public opinion of the South Korean people towards Japan is increasingly growing,which has led to a historical cold point since the normalization of South Korea-Japan diplomatic relations.the plummet of public opinion directly leads to a decline of bilateral trade between South Korea and Japan,especially South Korea’s import trade from Japan,does it happen by chance or are they intrinsically related?On the basis of further thinking and literature reviews,this paper puts forward whether the public opinion of South Korea to Japan can be quantified?If quantitative method can be conducted,which trade products are more susceptible to public opinion?How much is it affected?This paper discusses the influence of public opinion on South Korea’s imports from Japan and what enlightenment it will bring for us to interpret the bilateral trade.In this paper,we use the Japan-related news texts searched in Naver website from 2000 to 2019 as the data source,constructs the Korean sentiment indexs(KSIs)against Japan through the Korean sentiment dictionary,and conducts the time series analysis of the index.Based on Yan(2010)’s method of measuring bilateral relations between countries,this paper constructs the public opinion of South Korea towards Japan(CN).Due to the different time series properties of KSIs,VAR and VECM models were used to analyze the impact of public opinion shock on trade,and trade gravity model was used as a comparing.In order to further investigate the heterogeneity at the level of trade products and explore whether there are structural changes in trade affected by public opinion before and after the trade friction between Korea and Japan in July 2019,we convert monthly trade data according to end-use and divide different time samples for regression analysis.The results show that:(1)The negative KSI(Ne)and positive KSI(PO)have different time series properties,the past influence of the former will gradually dissipate,while the past change of the latter will have a permanent impact on it.(2)CN has characteristics of periodic.Combined with the relationship between South Korea and Japan and important bilateral events,the public opinion of South Korea on Japan in the 21st century can be divided into four stages.(3)The shocks of Ne have a significant impact on South Korea imports from Japan 2 months later,while the cumulative effects of the impact vanish 6 months later.Ne to Japan is not the Granger cause of South Korea’s exports to Japan and imports to other major trading partners.Negative KSI(Ne),aggregative KSI(Senti),Negative report rate(Nerate)and seasonally adjusted positive KSI(PO)are all significantly influence the imports after 1-2 months.(4)Before the occurrence of Korea-Japan trade friction in July 2019,there were few goods varieties affected by public opinions,focusing on food and beverage in the field of consumer goods and passenger vehicles,while capital goods,intermediate goods and consumer goods as a whole were not significantly affected by public opinions.After the trade friction,the structure of the influence of public opinion on trade has changed significantly,intermediate goods and consumer goods are affected by public opinion,and the scope of influence is significantly expanded.