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Media Bias against Foreign Firms as a Veiled Trade Barrier: Evidence from Chinese Newspapers

  • SUNG EUN KIM (a1)
Abstract

While the rules of international trade regimes prevent governments from employing protectionist instruments, governments continue to seek out veiled means of supporting their national industries. This article argues that the news media can serve as one channel for governments to favor domestic industries. Focusing on media coverage of auto recalls in China, I reveal a systematic bias against foreign automakers in those newspapers under strict government control. I further analyze subnational reporting patterns, exploiting variation in the level of regional government interest in the automobile industry. The analysis suggests that the media’s home bias is driven by the government’s protectionist interests but rules out the alternative hypothesis that home bias simply reflects the nationalist sentiment of readers. I show that this home bias in news coverage has meaningful impact on actual consumer behavior, combining automobile sales data and information on recall-related web searches.

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Corresponding author
Sung Eun Kim is an Assistant Professor of Political Science, Department of Political Science and International Relations, Korea University, 145 Anam-ro, Seongbuk-gu, Seoul, Korea, 02841 (sung_kim@korea.edu).
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I thank Andrew Cheon, Shigeo Hirano, Xian Huang, Dong Jung Kim, Florence Larocque, Yotam Margalit, Tamar Mitts, Andrew Nathan, Krzysztof Pelc, Pablo Pinto, Subhasish Ray, Johannes Urpelainen, Joonseok Yang, Boliang Zhu, three anonymous reviewers, and the journal’s editor for their useful comments. I also benefited from feedback from seminar participants at Columbia, LSE, NUS, NYU, NYU-Abu Dhabi, UPenn, Yale, and Yale-NUS and conference participants at APSA, IPES, and MPSA. I thank Kay Key Teo and Lee Shu Hui Jesslene for their excellent research assistance. All errors are my own. Replication files are available at the American Political Science Review Dataverse: https://doi.org/10.7910/DVN/JSR0OE.

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American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
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