The geopolitics of technology: Evidence from the interaction between the United States and China

Osama D. Sweidan ()
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Osama D. Sweidan: United Arab Emirates University, Al-Ain, United Arab Emirates

Russian Journal of Economics, 2024, vol. 10, issue 2, 130-150

Abstract: Recently researchers performed empirical economic studies to investigate how geopolitical risk impacts diverse economic sectors. We take a fresh perspective by exploring whether advancements in the U.S. IT sector can account for fluctuations in China's geopolitical risk. The conflict between China and the United States regarding semiconductors revolves around technological supremacy, economic dominance, and national security concerns. China has been striving to become self-sufficient in semiconductor production to reduce reliance on foreign suppliers, particularly the United States. However, the United States has imposed restrictions on semiconductor exports to China. Our study constructs a theoretical framework and utilizes the bounds testing approach for cointegration to estimate the parameters of the Autoregressive Distributed Lag model. We use monthly data from January 1993 to November 2023. The findings reveal that the U.S. IT sector significantly and positively influences China's geopolitical risk. From a policy implication perspective, the race to lead the global IT sector may emerge as the primary source of economic and political instability unless rival nations reach a compromise.

Keywords: geopolitical; risk; geopolitics; of; technology; information; technology; ARDL; model; United; States; China. (search for similar items in EconPapers)
JEL-codes: C22 D83 E02 F51 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:arh:jrujec:v:10:y:2024:i:2:p:130-150

DOI: 10.32609/j.ruje.10.118505

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