Authors: Matteo Crosignani, Lina Han, Marco Macchiavelli, and André F. Silva
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Staff Reports
Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls
Number 1096
April 2024
April 2024
JEL classification: G12, F51, F38
Amid the current U.S.-China technological race, the U.S. has imposed export controls to deny China access to strategic technologies. We document that these measures prompted a broad-based decoupling of U.S. and Chinese supply chains. Once their Chinese customers are subject to export controls, U.S. suppliers are more likely to terminate relations with Chinese customers, including those not targeted by export controls. However, we find no evidence of reshoring or friend-shoring. As a result of these disruptions, affected suppliers have negative abnormal stock returns, wiping out $130 billion in market capitalization, and experience a drop in bank lending, profitability, and employment.
Author Disclosure Statement(s)
Matteo Crosignani
I, Matteo Crosignani, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Lina Han
I, Lina Han, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Marco Macchiavelli
The author declares that he has no relevant or material financial interests that relate to the research described in this blog post.
Andre F. Silva
I, Andre F. Silva, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
I, Matteo Crosignani, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Lina Han
I, Lina Han, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Marco Macchiavelli
The author declares that he has no relevant or material financial interests that relate to the research described in this blog post.
Andre F. Silva
I, Andre F. Silva, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Suggested Citation:
Crosignani, Matteo, Lina Han, Marco Macchiavelli, and André F. Silva. 2024. “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls.” Federal Reserve Bank of New York Staff Reports, no. 1096, April. https://doi.org/10.59576/sr.1096
Crosignani, Matteo, Lina Han, Marco Macchiavelli, and André F. Silva. 2024. “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls.” Federal Reserve Bank of New York Staff Reports, no. 1096, April. https://doi.org/10.59576/sr.1096
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