No Beer No Friends: Quantifying the Effect of the Beer Boycott

We study the impact of the boycott on Japanese products, initiated in July, 2019, in the Korean beer market. First, sales of japanese beer decreased by more than 70 percent during the 14-month boycott period in the data. Second, the decrease in Japanese beer sales mostly reflected an increase in domestic beer sales. Lastly, the intensity of the boycott's effect has remained strong and stable despite a substantial decrease in traditional media coverage since the outbreak of the boycott movement. Our empirical findings suggest that political tensions can change market outcomes and negatively affect international trade for an extended period.