Foreign Political Risk and Technological Change
Journal: National Bureau of Economic Research
Year: 2025

This paper studies how innovation reacts to foreign political risk and shapes its economic consequences.In a model with foreign political shocks that can disrupt the supply of foreign inputs, we show that greater political risk abroad increases domestic innovation, thereby lowering reliance on risky sourcing countries.We then combine data on sector-level technology development with time-varying measures of industry-level exposure to foreign political risk and report three sets of empirical findi