The intergenerational transmission of historical conflicts: An application to China's trade.

We study the legacy effect and transmission mechanisms of historical conflicts on contemporary trade. Using new data on the regional dispersion of civilian deaths due to massacres in the Sino-Japanese war (1931–1945), we find that local conflict intensity predicts international trade patterns of Chinese corporations three generations later. We further explore the transmission mechanism of collective war memory. Conflict intensity correlates with measures of anti-Japanese sentiments inferred from survey data and it appears to be transmitted both through war dramas in the mass media as well as official commemorations. We also find evidence that the trade-inhibiting effect increases with the time exposed to collective war memory. • Use novel and disaggregate-level data on conflict intensity to predict international trade patterns three generations later. • The long-term persistence occurs through collective war memory. • The transmission of war memory is related to mass media contact and cultural policies. • The trade-inhibiting effect increases with the time exposed to war memory. [ABSTRACT FROM AUTHOR]

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