Which Sanctions Matter? Analysis of the EU/Russian Sanctions of 2014

30 Pages Posted: 13 Mar 2019

See all articles by Matěj Bělín

Matěj Bělín

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Jan Hanousek

Faculty of Business and Economics, Mendel University in Brno; Centre for Economic Policy Research (CEPR)

Date Written: February 2019

Abstract

In this paper we use a natural experiment of reciprocal imposition of trade sanctions by Russia and the EU since 2014. Using UNCTAD/BACI bilateral flows data we take this unique opportunity to analyse both sanctions. In particular, we study the effectiveness of narrow versus broadly defined sanctions, and differences in the effectiveness of sanctions imposed on exports and imports. We show that the Russian sanctions imposed on European and American food imports resulted in about 8 times stronger decline in trade flows than those imposed by the EU and the US on exports of extraction equipment. These results do not appear to be driven by diversion of trade flows via non-sanctioning countries. Hence the difference in sanctions' effectiveness can be attributed to the broader range of sanctioned goods and potentially to a stronger position of enforcement of sanctions on imports rather than exports.

Keywords: Bilateral trade flows, Differences-in-differences, International trade, Russia, sanctions, UNCTAD/BACI data

JEL Classification: C01, C23, F14

Suggested Citation

Bělín, Matěj and Hanousek, Jan, Which Sanctions Matter? Analysis of the EU/Russian Sanctions of 2014 (February 2019). CEPR Discussion Paper No. DP13549, Available at SSRN: https://ssrn.com/abstract=3346338

Matěj Bělín (Contact Author)

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences ( email )

Politickych veznu 7
Prague, 111 21
Czech Republic

Jan Hanousek

Faculty of Business and Economics, Mendel University in Brno ( email )

Brno
Czech Republic

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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