The Impact of Economic Sanctions on Global Supply Chains
Prof. Yaxuan QI
City University of Hong Kong
Date: 22 September 2023 (Friday)
Time: 10:30 am – 12:00 pm
Host: Prof. Wenjin KANG, Professor in Finance
Online registration: https://umac.au1.qualtrics.com/jfe/form/SV_aXjRV7smeb8ACOi
The use of economic sanctions as a means of addressing international disputes has become increasingly prevalent in recent years, causing significant uncertainty within global supply chain networks. This study examines the impact of economic sanctions on the restructuring of global supply chains, leveraging the United States’ sanction activities as quasi-natural experiments. Employing a difference-in-differences model, we investigate how firms connected to sanctioned entities through supply chains adjust their global supplier networks. Our findings reveal several stylized effects. Firstly, firms demonstrate a tendency to increase both the number and geographic diversification of their suppliers, featuring with a combination of more supplier termination and establishment of new suppliers. Secondly, we observe heterogeneity in supply chain adjustment strategies. Firms located in sanctioned countries, such as China and Russia, tend to relocate suppliers to their home countries. In contrast, firms situated in non-sanctioned countries, such as the United States and the United Kingdom, tend to reallocate suppliers to countries that maintain favorable political relationships with US or main revenue-generating countries. Lastly, we find that firms politically connected with the United States government experience minimal disruptions compared to other firms.
Prof. Yaxuan Qi is an Associated Professor in the Department of Economic and Finance at the City University of Hong Kong. She holds the position of Associate Editor at the Asia-Pacific Journal of Accounting and Economics. Her research interests encompass a wide range of areas, including corporate debt, law and finance, political economy, and international taxation. Dr. Qi has contributed to numerous internationally renowned journals, including Journal of Financial Economics, The Accounting Review, Journal of Law and Economics, Journal of Public Economics, and Journal of International Business Studies. Dr. Qi earned her PhD from the Rutgers University in New Jersey, United States. She obtained a BA in Economics & Law at the Central University of Finance & Economics in Beijing, and a MA in Finance at the Renmin University of China. Prior to her current role at the City University of Hong Kong, Dr. Qi served as a tenured Associate Professor at the Department of Finance, Concordia University, Canada.
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