Which sanctions matter? analysis of the EU/russian sanctions of 2014

Matěj Bělín and Jan Hanousek

Journal of Comparative Economics, 2021, vol. 49, issue 1, 244-257

Abstract: We use a quasi-natural experiment of reciprocal imposition of trade sanctions by Russia and the EU since 2014. Using UNCTAD/BACI bilateral flows data we take this unique opportunity to analyse both sanctions. In particular, we study the effectiveness of narrow versus broadly defined sanctions, and differences in the effectiveness of sanctions imposed on exports and imports. We show that the Russian sanctions imposed on European and American food imports resulted in about an 8 times stronger decline in trade flows than those imposed by the EU and the US on exports of extraction equipment. These results do not appear to be driven by diversion of trade flows via non-sanctioning countries. Hence the difference in sanctions’ effectiveness can be attributed to the limited retroactivity of Western sanctions, which allowed exemptions for exports made pursuant to contracts made prior to 2014.

Keywords: Russia; International trade; Sanctions; Differences-in-differences; Bilateral trade flows; UNCTAD/BACI Data (search for similar items in EconPapers)
JEL-codes: C01 C23 F14 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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Working Paper: Which Sanctions Matter? Analysis of the EU/Russian Sanctions of 2014 (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:49:y:2021:i:1:p:244-257

DOI: 10.1016/j.jce.2020.07.001

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