Geopolitical Risks and the Vulnerability of Multinational Listed Firms: Evidence from U.S.-Listed Chinese Companies during the Trade War

Geopolitical Risks and the Vulnerability of Multinational Listed Firms: Evidence from U.S.-Listed Chinese Companies during the Trade War | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Geopolitical Risks and the Vulnerability of Multinational Listed Firms: Evidence from U.S.-Listed Chinese Companies during the Trade War Bochuan Huang, Bin Zhang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9212925/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 4 You are reading this latest preprint version Abstract Geopolitical risks have become an important determinant of financial market outcomes, shaping firm performance and risk. However, firm-level evidence remains limited for firms exposed to multiple institutional environments, where transmission mechanisms differ from those in purely domestic markets. This study explores how geopolitical risks reshape the risk-return profile of multinational listed companies by analyzing U.S.-listed Chinese companies during the U.S.-China trade war. Using a quasi-experimental design with propensity score matching and difference-in-differences, we find that the trade war led to a significant decline in returns and an increase in volatility of the U.S.-listed Chinese companies. Two key channels of vulnerability are identified: (1) home country bias exacerbates spillovers from trade war, and (2) political transmission uncertainty is significantly higher in the listing countries than in the home country. Our results reveal a paradoxical market response: while financially robust companies exhibit greater return stability, they also experience heightened volatility. These findings highlight the vulnerability of cross-listed firms to geopolitical risks and underscore the role of dual institutional exposure in shaping market outcomes. Geopolitical risks Multinational Listed Companies U.S.-China trade war Home bias Political uncertainty Full Text Cite Share Download PDF Status: Under Review Version 1 posted Reviewers agreed at journal 14 Apr, 2026 Reviewers invited by journal 09 Apr, 2026 Editor assigned by journal 25 Mar, 2026 First submitted to journal 24 Mar, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9212925","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":620248569,"identity":"6521fe04-06cf-4653-9667-14013454c5bd","order_by":0,"name":"Bochuan Huang","email":"","orcid":"","institution":"Beijing Institute of Technology","correspondingAuthor":false,"prefix":"","firstName":"Bochuan","middleName":"","lastName":"Huang","suffix":""},{"id":620248570,"identity":"e424b067-db9e-4286-8d60-773a11e65008","order_by":1,"name":"Bin Zhang","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA8ElEQVRIiWNgGAWjYDACCSBmbJBg4Jd/2Pjgg4GNHfFaJBuSDxvOKEhLJlYLA4PBgbQ0YZ4Ph0Bs/EB+dvOzh193WORJNpwxY7YxOMDMwH746AZ8WhjnHDM3lj0jUczP2GP2OMfgDh8DT1raDXxamCUSzKQl2yQSZzbzmBvnGDxjZpDgMcOrhU0i/RtYy4ZjPGbSFgaHgUFBQAuPRI6Z5EeQljNsadIMxGiRkMgpk2Y8A3TYDObDhj0GaclshPwiPyN9m+TPHXWJ/RKMjQ9+/LGx42c/fAyvFhBg5kHxHSHlIMD4gxhVo2AUjIJRMHIBAImqSbfgWjafAAAAAElFTkSuQmCC","orcid":"","institution":"Beijing Institute of Technology","correspondingAuthor":true,"prefix":"","firstName":"Bin","middleName":"","lastName":"Zhang","suffix":""}],"badges":[],"createdAt":"2026-03-24 13:58:24","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9212925/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9212925/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":107483510,"identity":"8ad651a3-3c59-4c60-8ba9-7ea689f607c0","added_by":"auto","created_at":"2026-04-22 02:27:58","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":602597,"visible":true,"origin":"","legend":"","description":"","filename":"Manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9212925/v1_covered_5115bd6f-959e-4916-9e01-231e24129752.pdf"}],"financialInterests":"","formattedTitle":"Geopolitical Risks and the Vulnerability of Multinational Listed Firms: Evidence from U.S.-Listed Chinese Companies during the Trade War","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"review-of-world-economics","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"rowe","sideBox":"Learn more about [Review of World Economics](http://link.springer.com/journal/10290)","snPcode":"10290","submissionUrl":"https://www.editorialmanager.com/rowe/default2.aspx","title":"Review of World Economics","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"em","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"Geopolitical risks, Multinational Listed Companies, U.S.-China trade war, Home bias, Political uncertainty","lastPublishedDoi":"10.21203/rs.3.rs-9212925/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9212925/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eGeopolitical risks have become an important determinant of financial market outcomes, shaping firm performance and risk. 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