This study is an empirical investigation of the effects of diplomatic conflicts with neighboring countries on the value of industries and firms. Since the end of the Cold War era, diplomatic conflicts between nations have increasingly taken the form of economic sanctions, and the conflict between South Korea and China surrounding the deployment of THAAD (Terminal High Altitude Area Defense) has followed a similar trajectory. However, there is a lack of specific and empirical research on the extent to which diplomatic conflicts actually affect the value of industries and firms. This is partly because the specific measurement tools for verifying the linkage between diplomatically conflicting countries and corporate business activities remain unclear. This study empirically examined the effects of diplomatic conflicts on firm value using event study methodology, the World Input-Output Table, history of company analysis, and web scraping. The empirical results showed that during diplomatic conflicts, the industry-level linkage with the relevant country had a relatively small effect on firm value. However, investment in China through affiliated companies, individual firms' unique sensitivity, and high exposure to THAAD-related news were found to have significant negative effects on firm value.