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Financial Sanction Spillovers and Firm Interdependence

Lorenzo Crippa et al.

Journal of Politics2026https://doi.org/10.1086/740171article
AJG 4
Weight
0.50

What the paper says

States increasingly outsource coercion to the market, using sanctions to deter private actors from dealing with blacklisted entities. Despite the key role of such intermediaries, research on economic statecraft is ambiguous about the effect and boundaries of such actions on market participants. We analyze the impact of the Trump administration’s actions against Chinese tech giant Tencent. Leveraging an event-study, we find that sanctions negatively impact targets and spread to co-nationals. We also test a novel spillover mechanism: firm interdependence. Tencent acts as an investor in other companies and provides a technological platform for businesses unaffiliated with the firm. Both sets of firms, which include American tech companies, are negatively affected. The paper highlights the need for scholarship to incorporate firm interdependencies into theories of economic statecraft, especially as export controls, sanctions, and tariffs target industries marked by highly complex supply and financial chains.

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https://doi.org/https://doi.org/10.1086/740171

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@article{lorenzo2026,
  title        = {{Financial Sanction Spillovers and Firm Interdependence}},
  author       = {Lorenzo Crippa et al.},
  journal      = {Journal of Politics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1086/740171},
}

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Financial Sanction Spillovers and Firm Interdependence

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.