An Estimation of The Impact of Economic Sanctions and Oil Price Shocks on Iran-Russian Trade: Evidence from a Gravity- VEC Approach

Allah Morad Seif (), Hossein Panahi () and Davoud Hamidi Razi
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Allah Morad Seif: Department of Economics, Imam Hussein Comprehensive University, Tehran, Iran.
Hossein Panahi: Department of Economics, Tabriz University, Tabriz, Iran.

Iranian Economic Review (IER), 2017, vol. 21, issue 3, 469-497

Abstract: This article is an empirical attempt to explore the relationship between sanctions (financial and non-financial), oil price shocks and Iran-Russian bilateral trade flows over the period 1991–2014. In contrast to earlier studies in which a gravity model has been estimated through a panel data approach, in this paper the authors apply a gravity model for only two countries and do the estimations using the vector error correction approach. The overall estimation results indicate that financial sanctions, non-financial sanctions and oil price shocks negatively impact the Iran-Russian trade. Furthermore, financial sanctions had the greatest negative impact on Iran-Russian trade rather than non-financial sanctions and sharp oil price shocks.

Keywords: Iran-Russian Bilateral Trade; Sanctions; Oil Price Shocks; Gravity Model; Vector Error Correction Approach. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:21:y:2017:i:3:p:469

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