CEU Electronic Theses and Dissertations, 2023
| Author | Kruger, Angelo |
|---|---|
| Title | Economic Integration and Its Effects on Hostile State Behavior: Evidence from the China-Taiwan Dyad 2003 - 2023 |
| Summary | Political relations between China and Taiwan have steadily declined in recent years. At the same time, Taiwan was economically integrating with China for the better of two decades. Today, trade with China and Hong Kong makes up more than 38% of Taiwan’s total exports. This de-velopment poses a paradox: why do small economies integrate economically with politically hostile states that threaten their existence? I hypothesise that the economic integration of China and Taiwan has led to political disintegration, which can be observed in the changes in state be-haviour. In turn, this disintegration has caused a declining trend, leading to more hostile political and military action between the two economies. I test this assumption through the lens of com-mercial peace and economic integration theory in asymmetric rival dyads and by employing a series of multivariate regression (MVR) models at the state-month level for the period 2003 - 2023. The utilised hostility measure (dependent variable) is taken from the Integrated Crisis Early Warning System (ICEWS). The customs reports from China and Taiwan, and World Bank trade data provide economic integration variables (independent variables). This study finds empirical evidence that economic integration leads to political disintegration in the China-Taiwan dyad, but the interaction between economic integration and state behaviour is more nu-anced. First, imports from China increase its intensity behaviour (friendlier actions). However, the exact opposite is occurring for exports, which has a much higher negative impact on Chi-na’s behaviour. The same is true for exports to Hong Kong to a lesser extent. Scholars and pol-icymakers should take an interest in these differentiated effects of economic integration on the intensity of bilateral state behaviour to address declining micro trends early on. |
| Supervisor | Li, Andrew X. |
| Department | International Relations MA |
| Full text | https://www.etd.ceu.edu/2023/kruger_angelo.pdf |
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