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The impacts of U.S. Section 337 investigations on Chinese technology firms

Author

Listed:
  • Fan, Jiani
  • Hua, Xiuping
  • Wang, Miao
  • Wang, Yong
  • Zhang, Huayi

Abstract

This paper examines the valuation impact of investigations related to the alleged infringement of American intellectual property (IP) rights, specifically Section 337 investigations, on Chinese technology firms. Evidence suggests that the stock market responds negatively to announcements of Section 337 investigations in the short term; however, the long-term price impact varies significantly across firms. When focal firms actively formulate strategic adaptations, such as increasing R&D investments, diversifying international sales, and seeking government support, they enhance their dynamic capabilities, thereby fostering long-term value creation. Moreover, further analysis shows that state-owned enterprises (SOEs) underperform private firms in strategic adaptation and value creation, while firms without venture capital (VC) backing are also worse positioned than VC-backed firms.

Suggested Citation

  • Fan, Jiani & Hua, Xiuping & Wang, Miao & Wang, Yong & Zhang, Huayi, 2025. "The impacts of U.S. Section 337 investigations on Chinese technology firms," Research Policy, Elsevier, vol. 54(5).
    • Handle: RePEc:eee:respol:v:54:y:2025:i:5:s0048733325000393
    DOI: 10.1016/j.respol.2025.105210
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    Keywords

    Firm value; Strategic adaptations; R&D investments; International sales; Government subsidies;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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