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The Political Economy of Arms Export Restrictions: The Case of Japan

Published online by Cambridge University Press:  09 August 2012

ATSUSHI TAGO  and
GERALD SCHNEIDER
ATSUSHI TAGO
Affiliation:
Kobe University, [email protected]
GERALD SCHNEIDER
Affiliation:
University of Konstanz, [email protected].
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Abstract

The export of arms belongs to the most contested issues in democracies. In this article, we examine the economic repercussions of the recent easing of the Japanese arms exports restrictions. We develop a rational expectations argument to understand why some political events increase the income of the arms manufacturers, while other ones reduce it or have no effect at all. Event studies suggest that investors closely observe relevant political developments since stock prices of the six arms manufacturers companies reacted consistently to the announcements and leaks as to whether the arms export restrictions would be lifted or not.

Type
Research Article
Information
Japanese Journal of Political Science , Volume 13 , Issue 3 , September 2012 , pp. 419 - 439
Copyright
Copyright © Cambridge University Press 2012

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