Research

Who Bears the Costs of Technology Sanctions? Evidence from Global Smartphone Markets (with Ambre Elsas-Nicolle and Frank Verboven)

Abstract
U.S.–China trade tensions have led to sanctions on major Chinese firms, with potential spillovers to third-country markets. We study the effects of U.S. restrictions on Huawei’s access to key U.S. technologies in smartphone markets in the United States and Europe. Using product-level data, we show that the sanctions substantially reduced Huawei’s sales and prices, consistent with a negative demand shock. To quantify equilibrium effects, we develop a differentiated-products oligopoly model in which the sanctions degrade two key Huawei product attributes: access to Google Mobile Services and 5G chipsets. We find that the sanctions were effective in reducing Huawei’s profits, despite its divestiture of Honor to mitigate losses. While U.S. consumers are largely unaffected, European consumers experience considerable welfare losses. These findings indicate that firm-targeted sanctions can shift welfare losses away from the sanctioning country and onto third-country consumers.

Hybrid Marketplaces and Platforms’ Competition: Evidence from Chinese online platforms (with Frank Verboven)

Abstract
Many e-commerce platforms act as hybrid marketplaces, selling as first-party sellers while competing with third-party (3-P) sellers. Platforms may strategically use their market dominance to undermine third-party sellers and consumers, which raises antitrust concerns from policymakers. Using data from two Chinese hybrid marketplaces, JD.com and Tmall, we seek to study whether platforms' first-party entry in competition with other sellers harms these sellers, and ultimately consumers. Estimating the effects of platform entry, we find evidence of ''market expansion'': the entry of platform increases sales quantities and revenues for both brand and 3-P sellers. However, the effects are heterogeneous across sellers. On JD.com, platform entry generates ''business stealing'' effects that reduce the demand of incumbent 3-P sellers and lead to market reallocation toward larger sellers. In contrast, Tmall-owned entry expands demand without significantly harming incumbent sellers. Finally, we document asymmetric cross-platform effects. JD-owned entry generates positive demand spillovers for brand sellers on Tmall, while Tmall-owned entry increases demand for most sellers on JD.com. Overall, platform entry reshapes competition through market expansion, business stealing, and seller reallocation both within and across marketplaces.