This paper studies the trade promotion effects of state visits paid by Chinese political leaders by analyzing China’s trade flow with 184 countries between 1998 and 2014. International events are used to instrument state visits. The results find that trade promotion effects come two years after the visits. Moreover, the promotion effects are biased towards the industries and firms with connections to the government. Trade barriers offset the promotion effects of state visits.

This paper studies firms’ dynamic interaction in a Cournot market. In each period of the game, the firm decides whether to make a stochastic positioning investment (establishing or maintaining its position in market competition). The market demand is also stochastic (high or low). By adopting symmetric Market perfect Nash equilibrium, firms choose strategies to maximize the discounted present value of cash flow. By considering the cases with one, two, and three active firms in the market, respectively, we present the stage game market outcome, show the transition probabilities, find the steady state of the system, and discuss the speed of convergence. Our work allows for two types of uncertainty in firms’ interactions, which contribute to the dynamic oligopoly literature.

Reward for altruism and punishment for selfishness are crucial components for the maintenance of society. Past studies have provided strong evidence that people are willing to incur costs to punish selfish behaviors and to reward altruistic behaviors, but how their willingness to do so depends on their relationship with the individuals conducting the anti-social or pro-social behaviors is much less explored. To probe into this question, we devised a three-stage experiment that combined a revised dictator game and third-party reward or punishment. We employed two payoff frameworks, alignment and conflict, and analyzed how third-party’s willingness to reward and punish differed when their interests were either aligned or in conflict with the first-party under observation. We found that due to considerations for personal interests, third-party’s reward and punishment levels deviated from what was deemed “legitimate” by society, that is, the level of reward and punishment that enhances society’s intrinsic motivations to comply with social norms and act pro-socially. When an anti-social behavior was observed, third-party punished less severely under the alignment framework than under the conflict framework; when a pro-social behavior was observed, third-party demonstrated self-serving reward under the alignment framework, but they rewarded altruistically under the conflict framework. These findings provided evidence for third-party’s self-serving reward and punishment.

We review China–Korea conflict that broke out in July 2016 and examine the effects on China’s imports from Korea. We find that the trade deterioration effects vary over the stages of the conflicts China’s imports from Korea were not significantly affected in the first few months after July 2016. Trade deterioration effects manifested themselves after February 2017 and the estimates show that China’s imports from Korea reduced by 15%. Our results support the viewpoint that, in order to influence the political position of trading partners, the government may take advantage of trade ties.