Regional resilience during a trade war: The role of global connections and local networks

Economic sanctions can adversely affect target countries. We study how regions withstand these sanctions amid the US-China trade war. Adopting a geographic relational perspective, we posit that regional resilience hinges on global connections and local networks. Analyzing nightlight data, we find that regional resilience is closely tied to the nature of global connections: cities prioritizing high-value-adding exports perform better, while those reliant on foreign firms for exports and focused on processing trade are more vulnerable. Furthermore, cities with economic development zones exhibit greater resilience to the trade war, underscoring the importance of networks within these zones in mitigating adverse effects.