Sino–US trade frictions and corporate investment

Yanqiong Li, Dongning Li and Jie He

Finance Research Letters, 2025, vol. 79, issue C

Abstract: We examine the impact of Sino–US trade frictions on corporate investment of Chinese listed firms. The results show that: (1) Firms are affected by Sino–US trade frictions significantly reduce their capital expenditures; (2) The negative effect is more salient for firms with stronger financial constraints and higher value of waiting to invest; (3) Firms increase R&D investment when firms affected by trade frictions; (4) The overall investment efficiency increases by reducing the over-investment projects. This paper enriches literature on the economic consequences of trade frictions and the relationship between trade uncertainty and corporate investment.

Keywords: Trade frictions; Corporate investment; Trade remedy case; economic uncertainty (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004817

DOI: 10.1016/j.frl.2025.107218

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