The Economic Effects of International Sanctions: An Event Study

Jerg Gutmann, Matthias Neuenkirch and Florian Neumeier ()

No 9007, CESifo Working Paper Series from CESifo

Abstract: Although international sanctions are a widely used instrument of coercion, their economic effects are still not fully understood. This study uses a novel dataset and an event study approach to evaluate the economic consequences of international sanctions, thereby accounting for pre-treatment dynamics in countries subject to sanctions. Our analysis focuses on the effects of sanctions on GDP growths as well as various transmission channels through which sanctions affect economic activity. We document a significant negative effect of international sanctions on GDP growth and its components (consumption, investment, and government expenditures) as well as on trade and foreign direct investment. Additional panel difference-in-differences estimations reveal that this detrimental effect is driven by financial sanctions and US unilateral sanctions.

Keywords: economic growth; event study; international sanctions; transmission channels (search for similar items in EconPapers)
JEL-codes: F43 F51 F52 F53 O43 O47 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The economic effects of international sanctions: An event study (2023)
Working Paper: The Economic Effects of International Sanctions: An Event Study (2021)
Working Paper: The Economic Effects of International Sanctions: An Event Study (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9007

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