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Sino–US trade frictions and corporate investment

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  • Li, Yanqiong
  • Li, Dongning
  • He, Jie

Abstract

We examine the impact of Sino–US trade frictions on corporate investment of Chinese listed firms. The results show that: (1) Firms are affected by Sino–US trade frictions significantly reduce their capital expenditures; (2) The negative effect is more salient for firms with stronger financial constraints and higher value of waiting to invest; (3) Firms increase R&D investment when firms affected by trade frictions; (4) The overall investment efficiency increases by reducing the over-investment projects. This paper enriches literature on the economic consequences of trade frictions and the relationship between trade uncertainty and corporate investment.

Suggested Citation

  • Li, Yanqiong & Li, Dongning & He, Jie, 2025. "Sino–US trade frictions and corporate investment," Finance Research Letters, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004817
    DOI: 10.1016/j.frl.2025.107218
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    References listed on IDEAS

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