Staff Reports
Securing Technological Leadership? The Cost of Export Controls on Firms
Previous title: “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls”
Number 1096
April 2024 Revised February 2025

JEL classification: G12, F51, F38

Authors: Matteo Crosignani, Lina Han, Marco Macchiavelli, and André F. Silva

To safeguard its technological leadership, the U.S. has restricted domestic suppliers from exporting specific cutting-edge technologies to selected Chinese firms. Domestic firms affected by these export controls halt sales to Chinese customers, as intended, but struggle to establish new relations with alternative customers domestically or in politically aligned regions. As a result, domestic suppliers experience a $130 billion decline in market capitalization, along with reductions in profitability, employment, and bank lending. We also show how Chinese firms strategically respond to export controls. Overall, export controls impose significant costs on domestic firms producing the very technologies these policies intend to protect.

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Suggested Citation:
Crosignani, Matteo, Lina Han, Marco Macchiavelli, and André F. Silva. 2024. “Securing Technological Leadership? The Cost of Export Controls on Firms.” Federal Reserve Bank of New York Staff Reports, no. 1096, April. https://doi.org/10.59576/sr.1096

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