TY - JOUR

T1 - Impact of economic sanctions and counter-sanctions on the Russian Federation's trade

AU - Nguyen, Trung Thanh

AU - Do, Manh Hung

N1 - Funding Information: Acknowledgements: We would like to thank the International Trade Centre (ITC), the World Bank (WB) and the Bank of Russia for providing the data. MH Do would also like to thank the German Academic Exchange Service (DAAD) for financial assistance. We acknowledge the constructive comments from the editor and reviewers which are very helpful for us to improve the article. We thank Mark Brooks for his comments on an earlier version of the article.

PY - 2021/9

Y1 - 2021/9

N2 - Economic sanctions remain a popular tool in international politics and have drawn the attention of economists, policy makers and the public. In this study, we examine the impact of economic sanctions imposed by Western countries on the exports of the Russian Federation (RF) and the impact of counter-sanctions responded by the RF on its import. We use the data from 49 trading partners of the RF from 2011 to 2018 and employ a gravity modelling approach, which allows us to undertake differences-in-differences estimations to identify the causal effects of sanctions and counter-sanctions. We find that (i) economic sanctions against and counter-sanctions from the RF lead to declines in both aggregate export and import values of the RF. The sanctions cause a decline of 25.25% of the export values of the RF to, while counter-sanctions cause a decline of 25.92% of the RF's import values from sanctions sending countries; (ii) the effects of sanctions and counter-sanctions are not homogeneous among export and import products. The sanctions severely affect the RF's export of oil products with a reduction of about 36.56% of the export value while the effects of the sanctions on the RF's export of non-oil products are insignificant. Meanwhile, the counter-sanctions cause a decline in the import value of agro products by 54.52% and a decline in the import value of non-agro products by 20.86%. The decline in export and import indicates that these non-tariff barriers are harmful to both the RF and the countries imposing sanctions.

AB - Economic sanctions remain a popular tool in international politics and have drawn the attention of economists, policy makers and the public. In this study, we examine the impact of economic sanctions imposed by Western countries on the exports of the Russian Federation (RF) and the impact of counter-sanctions responded by the RF on its import. We use the data from 49 trading partners of the RF from 2011 to 2018 and employ a gravity modelling approach, which allows us to undertake differences-in-differences estimations to identify the causal effects of sanctions and counter-sanctions. We find that (i) economic sanctions against and counter-sanctions from the RF lead to declines in both aggregate export and import values of the RF. The sanctions cause a decline of 25.25% of the export values of the RF to, while counter-sanctions cause a decline of 25.92% of the RF's import values from sanctions sending countries; (ii) the effects of sanctions and counter-sanctions are not homogeneous among export and import products. The sanctions severely affect the RF's export of oil products with a reduction of about 36.56% of the export value while the effects of the sanctions on the RF's export of non-oil products are insignificant. Meanwhile, the counter-sanctions cause a decline in the import value of agro products by 54.52% and a decline in the import value of non-agro products by 20.86%. The decline in export and import indicates that these non-tariff barriers are harmful to both the RF and the countries imposing sanctions.

KW - Differences in differences

KW - Economic sanctions

KW - Gravity modelling

KW - Impact evaluation

KW - International trade

UR - http://www.scopus.com/inward/record.url?scp=85107656933&partnerID=8YFLogxK

U2 - 10.1016/j.eap.2021.05.004

DO - 10.1016/j.eap.2021.05.004

M3 - Article

AN - SCOPUS:85107656933

VL - 71

SP - 267

EP - 278

JO - Economic Analysis and Policy (Online)

JF - Economic Analysis and Policy (Online)

SN - 0313-5926

ER -