SCCEI Seminar Series (Winter 2027)

Friday, February 19, 2027 | 12:00 pm -1:20 pm Pacific Time
Goldman Room E409, Encina Hall, 616 Jane Stanford Way

Shielding or Stifling? How Restrictions on Foreign Acquisitions Shape Entrepreneurial Innovation in the U.S.

Governments increasingly restrict foreign acquisitions of domestic technologies to protect national security and technological leadership. Yet such restrictions may have unintended consequences for the very innovation capabilities they seek to safeguard. We examine how foreign acquisition restrictions reshape innovation incentives and trajectories among U.S. entrepreneurial firms, focusing on publicly announced foreign takeover blockages by the Committee on Foreign Investment in the United States (CFIUS). We argue that these blockages reduce the expected value of acquisition-based exit opportunities, particularly for technology-oriented startups that view foreign buyers as potential acquirers, thereby weakening incentives to invest in innovation.

Using a novel dataset of CFIUS-blocked acquisitions and a staggered difference-in-differences design, we find that entrepreneurial firms operating in the same sector as a blocked target experience an 18.3% decline in patented innovation output, despite not being directly involved in the blocked transaction. The decline reaches 25.8% in firms' core technological domains, accompanied by reductions in patent quality as measured by forward citations. Firms also redirect innovation away from their established technological domains toward new areas, but these shifts do not immediately yield improvements in innovation quality, suggesting significant adjustment costs.

Our findings highlight a fundamental tension in technology policy: restrictions intended to protect domestic technological capabilities may inadvertently weaken entrepreneurial innovation by reducing expected exit opportunities and disrupting firms' technological trajectories.

About the Speaker 
 

Nan Jia is the Capt. Henry W. Simonsen Chair in Strategic Entrepreneurship and Professor of Strategic Management at the USC Marshall School of Business.

Her research examines how firms build, sustain, and renew competitive advantage in complex institutional and technological environments. Drawing on strategic management, entrepreneurship, and organizational theory, she studies business-government relations, innovation, emerging technologies, and corporate strategy, with a particular focus on how firms navigate the intersection of markets, governments, and society. 

A major stream of her research investigates how public policies and institutional environments shape entrepreneurship, innovation, and firm strategy in both developed and emerging economies. Her work has examined how government actions influence entrepreneurial activity, technological development, innovation outcomes, and the evolution of competitive advantage. More recently, she has studied how artificial intelligence and machine learning affect productivity, creativity, decision-making, and innovation in organizations ranging from entrepreneurial ventures and startups to large established firms. She also develops machine-learning-based methods to measure and study organizational and strategic outcomes, including innovation and technological change.

In addition to her research, Nan is a leader in teaching innovation in product management. She is the co-creator and academic director of USC Marshall's Graduate Certificate in Product Management and a co-creator of the Undergraduate Minor in Product Management. Her teaching focuses on product strategy, human-AI collaboration, innovation, and data-driven decision-making.

Questions? Contact Xinmin Zhao at xinminzhao@stanford.edu