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Techno-Nationalism and Cross-Border Acquisitions in an Age of Geopolitical Rivalry

Resource type
Date created
2024-06-24
Authors/Contributors
Author: Li, Jing
Author: Zhang, Peng
Abstract
We study the U.S.-China rivalry in the context of geopolitical techno-nationalism, the use of technology policies to develop or maintain geopolitical advantage. We follow the international relations literature to argue that an incumbent hegemon, when threatened, seeks to maintain the balance of power through a combination of domestic policies and external alliances. We examine the effects of two policies on Chinese firms’ technology acquisitions: China’s Made in China 2025 (MIC2025), initiated in 2015, and the U.S. response in 2018 through the Foreign Investment Risk Review Modernization Act (FIRRMA). We argue that MIC2025 encouraged Chinese companies to acquire U.S. technology companies, and that this was perceived as a threat in the U.S., which countered through FIRRMA to limit such acquisitions. Using acquisition data from 2010 to 2022, we find that MIC2025 increased Chinese firms’ acquisition announcements in critical technology sectors in the U.S., but FIRRMA had a negative effect on both announcements and completions. We also find evidence suggesting spillover effects of FIRRMA to countries that are U.S. allies, but only if they are innovation leaders with low trade dependence on China. We conclude that geopolitical techno-nationalism shapes cross-border investments in critical technologies in both the U.S. and some allies.
Description
The fulltext of this manuscript will be available in August 2025 after the embargo period for the Journal of International Business Studies has expired. If you require fulltext access prior to the end of the embargo period please contact summit@sfu.ca.
Embargo period
Accepted date
31 July 2024
Available date
1 August 2025
Publication details
Publication title
Journal of International Business Studies
Document title
Techno-Nationalism and Cross-Border Acquisitions in an Age of Geopolitical Rivalry
Date
2024
Scholarly level
Peer reviewed?
Yes

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