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Do economic sanctions affect protectionism? Evidence from agricultural support

Zhike Lv and Ting Xu

Economics and Politics, 2019, vol. 31, issue 1, 27-42

Abstract: The objective of this paper is to examine whether economic sanctions contribute to influencing the target countries’ protectionist policies in the agricultural sector. Using pooled mean group estimations in a dynamic heterogeneous panel setting, we find robust empirical evidence that, in the long‐run, economic sanctions decrease agricultural protection in the target counties, and this effect is mitigated by the wealth of the target's economy. However, the relationship is insignificant in the short run. Furthermore, our results also suggest that the impact of sanctions on agricultural protection (a) increases with the severity of economic sanctions, (b) is greater for multilateral sanctions than unilateral sanctions, and (c) is more severe on agricultural protection when sanctions span a longer duration.

Date: 2019
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Handle: RePEc:bla:ecopol:v:31:y:2019:i:1:p:27-42