Do China and Russia undermine US sanctions? Evidence from DiD and event study estimation

Arbeitspapier

A frequently employed argument against imposing international sanctions is that rival superpowers are likely to bust sanctions to simultaneously shield the target, harm the sender, and make a profit. We evaluate the legitimacy of this concern by studying the effect of US sanctions on trade flows between sanctioned and third countries during the period 1995-2019 using panel difference-in-differences estimations and an event study design. Motivated by the claim that China and Russia purposefully undermine US sanction efforts, we test whether target countries' trade with China and Russia increases under US trade sanctions. We find no evidence for systematic sanction busting. Russia does not change its trade patterns with sanctioned countries. Trade of targets of US sanctions with China declines even more than trade with the US. These general patterns are reconfirmed for trade in different groups of commodities. In addition, we find some evidence that a reduction in industrial value added and a devaluation of the domestic currency of the target country are transmission channels through which US sanctions hamper trade with third countries.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Research Papers in Economics ; No. 8/22

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Trade Policy; International Trade Organizations ; Empirical Studies of Trade ; International Relations, National Security, and International Political Economy: General ; International Conflicts; Negotiations; Sanctions ; National Security; Economic Nationalism ; International Agreements and Observance; International Organizations ; International Law
• Thema: Geopolitics ; international political economy ; international sanctions ; trade substitution

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Gutmann, Jerg ; Neuenkirch, Matthias ; Neumeier, Florian
• Ereignis: Veröffentlichung
• (wer): Universität Trier, Fachbereich IV - Volkswirtschaftslehre
• (wo): Trier
• (wann): 2022

Weitere Informationen

• Handle: http://hdl.handle.net/10419/272359
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ