Quantifying the impact of economic sanctions on international trade in the energy and mining sectors

Abstract

Capitalizing on the latest developments in the gravity literature, we utilize two new datasets on sanctions and trade to study the impact of economic sanctions on international trade in the mining sector, which includes oil and natural gas. We demonstrate that the gravity equation is well suited to model bilateral trade in mining and find that sanctions have been effective in impeding mining trade. Our analysis reveals that complete trade sanctions have reduced bilateral mining trade by about 44 percent on average. We also document the presence of significant heterogeneity in the effects of sanctions on mining trade across mining industries and across sanction episodes/cases, depending on the sanctioning and sanctioned countries, the type of sanctions used, and the direction of trade flows. We take a close look at the impact of recent sanctions on Iran and Russia.

Geopolitical conflicts, sanctions and international knowledge flows: EU–Russia collaboration during the Ukraine crisis

“…The gravity models have a long tradition in the estimation of treatment effects associated with factors fostering or hampering international relations (e.g. Baier & Bergstrand, 2007; Larch et al, 2022; Slavov, 2007). Gravity models for the analysis of knowledge flows have, for instance, been proposed in Peri (2005), Picci (2010) and Keller and Yeaple (2013).…”

Going Dutch? Firm exports and FDI in the wake of the 2014 EU‐Russia sanctions

“…Publicly available datasets on sanctions have evolved to give better detail about the scope of the sanctions implemented with information on whether sanction episodes include travel bans, asset freezes, trade restrictions, financial restrictions, and military restrictions (e.g., Felbermayr et al, 2020;Hufbauer et al, 1990;Morgan et al, 2009Morgan et al, , 2023Weber & Schneider, 2020). These endeavors have resulted in a large body of literature to quantify how sanctions-induced increases in trade costs impact on bilateral trade in commodities (see, e.g., Kohl and Klein Reesink (2019) for a detailed overview of the literature, and Larch et al (2022) for a recent application to the case of trade in energy and mining). While multi-country, multi-sanction analyses can in principle be informative to learn about average effects, a drawback is that sanctions vary in their purpose and design (Giumelli, 2011), which calls for additional, contextualized analyses.…”

Environmental CSR From the Standpoint of Stakeholder Theory: Rethinking in the Era of Artificial Intelligence

“…Amid the international sanctions crisis, environmental CSR has taken on new significance. Environmental concern has become a mechanism for linking companies to communities (Larch et al, 2022). Environmental CSR can and most likely will become a significant criterion making decisions on the inclusion of companies in newly-emerging international value chains (Le and Hoang, 2022).…”