Abstract: The relationship between enterprises on the US sanction list and their US suppliers plays a critical role in mitigating pressures from technological blockades. However, existing research has yet to sufficiently explore how such sanctions impact the relationships between sanctioned enterprises and their US suppliers, and how sanctioned enterprises leverage their inherent characteristics to maintain these supplier relationships. Drawing on signal theory, this study investigates the dynamics and adjustments in buyer-supplier relationships against the backdrop of the US sanction list, and employs the data of transactions between listed Chinese ICT enterprises and their US suppliers from 2014 to 2023 for empirical validation. The findings reveal that the US sanction list has a significant risk spillover effect that predisposes suppliers to conservative strategies in transaction decisions, as evidenced by much less transactions concluded with sanctioned clients. Yet it is worth noting that the risk spillover effect weakens when sanctioned enterprises are state-owned or pivotal in the market, and strengthens when sanctioned enterprises are heavily reliant on innovations in the US or highly digitalized. These findings broaden the research on the economic consequences of the US sanction list through a perspective of dyadic relationship, and provide strategic guidance for enterprises navigating geopolitical conflicts to enhance their supply chain management.

Key words: Sino-US trade friction, sanction list, risk spillover effect, signal theory, buyer-supplier relationships