Research On The Impact Of International Political Conflicts On Transnational Tourism Trade

The impact of political events on the economy has long been a concern for scholars at home and abroad.Political conflicts between countries over security,religion and territory can affect trade between the two countries to some extent.For example,cross-border tourism trade,transportation trade and physical trade trade.Among them,cross-border tourism trade is relatively more timely to reflect the direct impact of international political conflicts.With the continuous increase of Chinese residents’ income and the increasing prevalence of transnational tourism consumption,China has become the world’s largest source of overseas tourists for several consecutive years,and China’s total tourism service trade accounted for 35.1% of total service trade in 2017.Due to its cultural proximity and geographical distance,China is an important source of transnational tourists for Korea.Especially in recent years,China has been the number one source country for South Korea’s tourists.In 2019,the number of Chinese consumers visiting South Korea was as high as 8.26 million,and Chinese tourists accounted for about 38% of the total number of inbound tourists in South Korea.In2016,South Korea decided to deploy THAAD to counter the threat from North Korea.Affected by the THAAD incident,an international political event,the international relations between China and South Korea have almost broken down.Chinese tourism to South Korea is also facing an impact.Based on the above background,this paper uses synthetic control methods to analyze how this event affects Chinese consumers’ travel to South Korea based on international tourism panel data from 31 countries from 2010 to 2019.The empirical research in this paper shows that the international political conflict caused by the THAAD incident will significantly reduce Chinese consumers’ travel to South Korea,and these conflicts will cause losses in the short term of South Korea’s tourism revenue,but will not have a long-term impact on South Korea’s tourism industry.Subsequently,this paper uses the ranking test and the placebo test for testing,and the empirical results remain robust.Further analysis found that although South Korea’s tourism industry has suffered,China’s neighboring countries(regions)have benefited from the substitution of tourism trade.But this substitution effect only exists in the short term,and its long-term effect gradually decreases over time.