Exposure to trade disruptions in case of the Russia-Ukraine conflict: a product network approach

Erik Braun (), Emese Braun (), András Gyimesi (), Zita Iloskics () and Tamás Sebestyén ()
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Erik Braun: UNIVERSITY OF PÉCS-FACULTY OF BUSINESS AND ECONOMICS
Emese Braun: UNIVERSITY OF PÉCS-FACULTY OF BUSINESS AND ECONOMICS
András Gyimesi: UNIVERSITY OF PÉCS-FACULTY OF BUSINESS AND ECONOMICS
Zita Iloskics: UNIVERSITY OF PÉCS-FACULTY OF BUSINESS AND ECONOMICS
Tamás Sebestyén: UNIVERSITY OF PÉCS-FACULTY OF BUSINESS AND ECONOMICS
Authors registered in the RePEc Author Service: Tamás Sebestyén

UPFBE Working Paper Series from Faculty of Business and Economics, University Pécs

Abstract: The recent outbreak of the Russia-Ukraine military conflict is expected to affect the world economy through global value chains due to sanctions imposed on the Russian economy and a severe decline in Ukrainian production. This study provides a first-cut analysis of the possible economic impact of this war on third countries. Using product-level export data from international trade statistics, we first identify the most important products exported by Ukraine and Russia. Then, applying a comprehensive indicator of exposure, we measure the dependence of third countries on products imported from Ukraine or Russia, taking into consideration indirect trade connections and the substitutability of imports with domestic production. The results show that Ukraine is dominant in global trade through exporting iron products and agricultural products, while Russia is important through exporting energy sources, raw materials, and iron products. Analysing countries’ total exposures, we found that the post-Soviet and European countries have high exposure to Russian imports, confirming the energy dependence of these countries. The Middle East and African countries heavily depend on Ukraine, especially for grain imports, possibly causing food security problems. Finally, the results explain why some European countries hesitate to apply sanctions on Russia in the field of energy sources.

Keywords: International trade; Global value chains; Russia-Ukraine war; Network analysis; Exposure. (search for similar items in EconPapers)
Pages: 47 pages
Date: 2022-05
New Economics Papers: this item is included in nep-agr, nep-cis, nep-int, nep-net and nep-tra
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https://journals.lib.pte.hu/index.php/workingpapers/article/view/5609/5412 (application/pdf)

Related works:
Journal Article: Exposure to trade disruptions in case of the Russia–Ukraine conflict: A product network approach (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:pec:wpaper:2022_1

DOI: 10.15170/upfbe.wps.S2022E01

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