Strategizing in a Turbulent World: Analyzing the Effects of International Sanctions and Policy Shifts on Corporate Innovation

Abstract

This study examines the impact of international sanctions and policy shifts on the technological innovation of non-financial publicly listed companies in China from 2007 to 2022. It articulates the theoretical mechanisms through which international sanctions affect corporate technological innovation, considering aspects of international trade and capital flows. The findings indicate that international sanctions significantly inhibit corporate innovation, whereas policy shifts substantially foster it. Moreover, international sanctions can restrict corporate innovation through limitations on international trade and capital flows. Based on these findings, the study proposes relevant recommendations.