Cao, YuDe Nicola, FrancescaMattoo, AadityaTimmis, Jonathan2024-10-232024-10-232024-10-23https://hdl.handle.net/10986/42282Recent U.S.-China tensions have raised the specter of technological decoupling. This paper examines the impact of U.S. export restrictions and technology licensing on Chinese firms’ innovation. It finds that U.S. sanctions reduce the quantity and quality of patent outputs of targeted Chinese firms, primarily due to decreased collaboration with U.S. inventors. However, firms with higher initial patent stock or in sectors with a smaller technological distance to the U.S. are less affected. Sanctions in specific technology fields lead to a decline in the patent output of both Chinese firms with U.S. collaborators and U.S. firms with Chinese collaborators.en-USCC BY 3.0 IGOINNOVATIONENTITY LISTDECOUPLINGINDUSTRY, INNOVATION AND INFRASTRUCTURESDG 9Working PaperWorld Bank10.1596/1813-9450-10950