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Technology Sanctions and Firm R&D: Evidence From the U.S.–China Trade Dispute

Author

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  • Kazunobu Hayakawa
  • Chih‐Hai Yang

Abstract

The United States has implemented export control regulations targeting China. Specifically, it has included numerous Chinese companies on the Entity List, which is a list of parties of concern. Exporters of regulated items or technologies to these listed firms must obtain permission from the U.S. government. This study investigated how this technology sanction hinders the R&D activities of sanctioned Chinese firms. Specifically, we applied the matching method to firm‐level data from 2015 to 2022. Our findings indicated that technology sanctions did not increase R&D investment and R&D intensity despite the decline in the total assets of sanctioned firms. When we separated the listed firms by license review policy (i.e., strictness of license review), we again observed insignificant effects on R&D investment in both categories of sanctioned firms. Notably, less strictly sanctioned firms accumulated more inventories, whereas more strictly sanctioned firms received increased financial support from the government in response to the technology sanctions.

Suggested Citation

  • Kazunobu Hayakawa & Chih‐Hai Yang, 2026. "Technology Sanctions and Firm R&D: Evidence From the U.S.–China Trade Dispute," Economics and Politics, Wiley Blackwell, vol. 38(2), pages 406-419, July.
    • Handle: RePEc:bla:ecopol:v:38:y:2026:i:2:p:406-419
    DOI: 10.1111/ecpo.70033
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