The Comprehensive Effect of the US-China Trade War on the Chinese Chip Industry: A Dynamic Perspective Based on Return

Research Article
Open access

The Comprehensive Effect of the US-China Trade War on the Chinese Chip Industry: A Dynamic Perspective Based on Return

Xueru Lei 1*
  • 1 Rensselaer Polytechnic Institute    
  • *corresponding author leix3@rpi.edu
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/42/20232088
AEMPS Vol.42
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-105-6
ISBN (Online): 978-1-83558-106-3

Abstract

Along with the growing trade conflict between China and the America, many Chinese industries have been affected by it. The impact on the Chinese chip industry is particularly dramatic. Depending on some studies, due to the deteriorating relationship between these two big countries, the United States has implemented many restrictive policies on Chinese chip industry, such as limiting technical support from U.S. companies to Chinese companies and requiring licenses for related companies to cooperate with Chinese companies. This series of initiatives on the Chinese chip industry is a huge impact, but also greatly influence the trend of the Chinese chip stock market. This study uses the ARIMA model to estimates the chip index without U.S.-China trade conflict The model based on weekly data finds that in the ultra-short term, the influence of the trade war on the chip index is relatively small. The model based on monthly data finds that in the short term (4 months) the average effect of this conflict on the chip index is about -3.29%.

Keywords:

China-US trade war, chip industry, modeling, impact

Lei,X. (2023). The Comprehensive Effect of the US-China Trade War on the Chinese Chip Industry: A Dynamic Perspective Based on Return. Advances in Economics, Management and Political Sciences,42,110-115.
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References

[1]. S Grimes, D Du, (2022), China’s emerging role in the global semiconductor value chain, Telecommunications Policy,101959.

[2]. X Gu, W Zhang, S Cheng, (2021), How do investors in Chinese stock market react to external uncertainty? An event study to the Sino-US disputes, Pacific-Basin Finance Journal,101614.

[3]. L Jiang, Y Lu, H Song, G Zhang, (2023), Responses of exporters to trade protectionism: Inferences from the US-China trade war, Journal of International Economics,103687

[4]. T J. Shattuck, (2021), Stuck in the Middle: Taiwan's Semiconductor Industry, the U.S.-China Tech Fight, and Cross-Strait Stability, Orbis, Pages 101-117

[5]. Y Chen, S Zhang, J Miao. (2023) The negative effects of the US-China trade war on innovation: Evidence from the Chinese ICT industry, Technovation,102734

[6]. Y Zhang, (2018). The US–China Trade War: A Political and Economic Analysis. Indian Journal of Asian Affairs, 31(1/2), 53–74. https://www.jstor.org/stable/26608823

[7]. Y Zhang, X Zhu, (2023), Analysis of the global trade network of the chip industry chain: Does the U.S.-China tech war matter? Heliyon, e17092

[8]. X Zhou, Y Gao, P Wang, B Zhu, (2022), Examining the overconfidence and overreaction in China’s carbon markets, Economic Analysis and Policy, Pages 472-489

[9]. S Parveen, Z W Satti, Q A Subhan, S Jamil, (2020), Exploring market overreaction, investors’ sentiments and investment decisions in an emerging stock market,Borsa Istanbul Review, Pages 224-235

[10]. O Borgards, R L. Czudaj, (2020). The prevalence of price overreactions in the cryptocurrency market, Journal of International Financial Markets, Institutions and Money,101194

Cite this article

Lei,X. (2023). The Comprehensive Effect of the US-China Trade War on the Chinese Chip Industry: A Dynamic Perspective Based on Return. Advances in Economics, Management and Political Sciences,42,110-115.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development

ISBN：978-1-83558-105-6(Print) / 978-1-83558-106-3(Online)
Editor：Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.42
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. S Grimes, D Du, (2022), China’s emerging role in the global semiconductor value chain, Telecommunications Policy,101959.

[2]. X Gu, W Zhang, S Cheng, (2021), How do investors in Chinese stock market react to external uncertainty? An event study to the Sino-US disputes, Pacific-Basin Finance Journal,101614.

[3]. L Jiang, Y Lu, H Song, G Zhang, (2023), Responses of exporters to trade protectionism: Inferences from the US-China trade war, Journal of International Economics,103687

[4]. T J. Shattuck, (2021), Stuck in the Middle: Taiwan's Semiconductor Industry, the U.S.-China Tech Fight, and Cross-Strait Stability, Orbis, Pages 101-117

[5]. Y Chen, S Zhang, J Miao. (2023) The negative effects of the US-China trade war on innovation: Evidence from the Chinese ICT industry, Technovation,102734

[6]. Y Zhang, (2018). The US–China Trade War: A Political and Economic Analysis. Indian Journal of Asian Affairs, 31(1/2), 53–74. https://www.jstor.org/stable/26608823

[7]. Y Zhang, X Zhu, (2023), Analysis of the global trade network of the chip industry chain: Does the U.S.-China tech war matter? Heliyon, e17092

[8]. X Zhou, Y Gao, P Wang, B Zhu, (2022), Examining the overconfidence and overreaction in China’s carbon markets, Economic Analysis and Policy, Pages 472-489

[9]. S Parveen, Z W Satti, Q A Subhan, S Jamil, (2020), Exploring market overreaction, investors’ sentiments and investment decisions in an emerging stock market,Borsa Istanbul Review, Pages 224-235

[10]. O Borgards, R L. Czudaj, (2020). The prevalence of price overreactions in the cryptocurrency market, Journal of International Financial Markets, Institutions and Money,101194

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