The economic effect of Russia imposing a food embargo on the European Union with Hungary as an example

Judit Sági and Edward Evgenevich Nikulin

Studies in Agricultural Economics, 2017, vol. 119, issue 2

Abstract: In the summer of 2014, Russia imposed a food embargo on most agricultural products from countries that supported the anti-Russian sanctions. In this study we use vector autoregression and neural network modelling to assess the effect of the embargo on the bilateral trade relations between the European Union (EU) (using the example of Hungary as an EU Member State) and Russia. In particular, the changes in the dynamics of Hungary’s aggregate agricultural exports in response to the shock of the embargo, as well as to Russia’s imports of products banned under the embargo, are analysed. The work also looks at the effectiveness of the introduction of the embargo with the aim of implementing import substitution policies and supporting domestic producers. Our results show the ineffectiveness of the Russian import substitution policy and the negative effects on both Russian and Hungarian parties.

Keywords: Agribusiness; Agricultural and Food Policy; Agricultural Finance; Crop Production/Industries; Demand and Price Analysis; Food Security and Poverty; Institutional and Behavioral Economics; International Relations/Trade; Livestock Production/Industries; Political Economy; Production Economics; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ags:stagec:262426

DOI: 10.22004/ag.econ.262426

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