Professor Kristi Govella publishes new article

Professor Kristi Govella has published a new article entitled “Tools of Japanese Economic Statecraft and Firm Responses: Case Studies of Rare Earths, COVID-19, and Semiconductors” in Asian Politics & Policy. Governments have increasingly turned to economic statecraft to address negative security externalities resulting from economic interdependence. How have governments attempted to shape the behavior of firms, and how have firms responded? This article examines Japanese economic statecraft in response to the 2010 Chinese rare earths export ban, COVID-19 pandemic supply chain disruptions, and semiconductor supply chain vulnerability. The Japanese government has used a wide range of tools to influence firms, focusing predominantly on positive incentives to encourage innovation, structural reform, investment, and relocation rather than negative incentives such as export controls. The government has turned its traditional levers of economic policy to new purposes to deal with changing security threats, reflecting varying goals such as bolstering resilience and promoting competitiveness. Government policy has been most effective in shaping firm behavior and mitigating negative security externalities in the case of rare earths.

The article is published open-access.