International Sanctions and Innovation: Empirical Evidence from China’s A-Share Listed Companies

Based on data from A-share listed companies in China from 1990 to 2018, this research explores the impact of international sanctions on enterprise technological innovation and their mechanism. Findings demonstrate that international sanctions have a significant inhibitory impact on enterprise technological innovation and are still valid after several robustness tests and endogeneity treatments. Analysis of heterogeneous enterprises presents that the inhibitory effect is mitigated in state-owned enterprises (SOEs) and monopoly industry enterprises, but intensifies in high-tech enterprises. Further mechanism analysis notes that the inhibitory effect is partly transmitted by weakening the internal and external financing capacities of companies.