Navigating Geopolitical Tensions: The Role of Industrial and Technological Factors on Knowledge Flows Between U.S. and China

Abstract

This study investigates how geopolitical tensions impact cross-border knowledge flows between U.S. and  Chinese firms, focusing on the mediating role of switching costs and the moderating effects of industrial  chain dependency and technological substitutability. Drawing on Resource Dependence Theory (RDT) and  the Knowledge-Based View (KBV), we empirically analyze comprehensive secondary datasets, including  patent citation data and geopolitical risk indices. Our findings reveal that geopolitical tensions significantly  reduce knowledge flow intensity, particularly in industries with high technological substitutability and cost  sensitivity. However, industrial chain dependency mitigates these effects, with switching costs partially  mediating the relationship. This study contributes to RDT by incorporating geopolitical risks as critical  external dependencies and extends KBV by highlighting firms’ adaptive strategies in politically volatile  environments. These insights offer actionable guidance for firms and policymakers in navigating politically  sensitive global value chains.