ABSTRACT
This chapter answers two questions related to the cold politics, hot economics phenomenon. In the frequent backlash against Japanese firms in China, which types of companies are targeted and how? Second, how do the of becoming a targeted symbol of their home country lead to use of the exit, voice, or loyalty strategies? Using a unique firm-level event dataset collected from newspapers and narrative interview data from business managers, consultants, and bureaucrats, the analysis finds that more consumer-oriented firms are more visible to the Chinese public and hence targeted, but they are less likely to perceive it as an increased risk. Firms that are not targeted are counterintuitively more likely to express concerns, but since they seldom actually experience damage to profits following political tensions, they are rarely compelled to change their behavior.
