Risk perceptions, anxiety and the future of international trade: a cross-national study of public trade preferences in Asia under COVID-19

Abstract

ABSTRACT The COVID-19 pandemic has stalled the world’s economic activities and obscures the future of economic and trade. Many observers concern that the pandemic would result in growing protectionist attitudes in trade. This article provides one of the first systematic assessments to examine the impact of the COVID-19 pandemic on the public’s trade preferences. Using original cross-national surveys in six key and highly integrated economies in Asia – Hong Kong, Japan, Singapore, South Korea, Taiwan, and Thailand – we found that most people support establishing closer trade relationships with foreign countries. However, most people prefer to buy more domestic products than foreign products. We test a behavioural model of trade preferences to understand the psychological impacts of COVID-19 pandemic. Consistent with prior studies, we found that a greater level of anxiety is negatively associated with support for trade and foreign product preference, after controlling for the effects of ethnocentrism, education and other socioeconomic factors. Job and health insecurities reduced public preference for buying more foreign products, but it stimulated more support for trade with other countries. This study contributes to the behavioural theory of international political economy and sheds light on the future of economic globalization.