When the Hegemon Barks and Markets Don’t Bite

• In Event: Political Economy of Economic Statecraft

Abstract

Great powers have long turned to economic statecraft as a central tool in shaping geostrategic competition. According to much existing literature, powerful states outsource discipline to market actors, who enforce blacklists and inflict reputational costs on private actors from rival states. In this paper, we explore this mechanism in the context of a growing US-China rivalry. To do so, we employ an event study, which examines a series of coercive actions by the US government to punish Chinese firms. We then explore the consequences of these specific sanctions on the market value of Chinese firms listed on US exchanges more generally. The paper, then, makes a number of important substantive contributions to debates on economic coercion and US-China rivalry. Methodologically, it uses firm level data to help uncover the limits and constraints of economic coercion.

Authors

• Nikhil Kalyanpur, London School of Economics

• Abraham Newman, Georgetown University

• Qi Zhang, Georgetown University