Arbeitspapier
The empirical consequences of trade sanctions for directly and indirectly affected countries
Economic sanctions are a popular diplomatic tool for countries to enforce political demands abroad or to punish non-complying countries. There is an ongoing debate in the literature if this tool is effective in reaching these goals. This paper adds to the literature by treating sanctions like a negative form of trade agreements. In order to quantify the direct effects of sanctions on the trade flows between countries I make use of a gravity equation controlling for country pair, importer-year, and exporteryear fixed effects. The estimates reveal that there is a significant decrease in the value of trade after the introduction of sanctions. In a second step, trade diversion is introduced as a potential instrument for countries to soften the negative impact of sanctions. However, the estimates reveal no evidence for trade diversion.
- Language
-
Englisch
- Bibliographic citation
-
Series: FIW Working Paper ; No. 174
- Classification
-
Wirtschaft
- Subject
-
gravity
international trade
trade sanctions
- Event
-
Geistige Schöpfung
- (who)
-
Frank, Jonas
- Event
-
Veröffentlichung
- (who)
-
FIW - Research Centre International Economics
- (where)
-
Vienna
- (when)
-
2017
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Frank, Jonas
- FIW - Research Centre International Economics
Time of origin
- 2017
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