You’re banned! The effect of sanctions on German cross-border financial flows

Besedeš, Tibor; Goldbach, Stefan; Nitsch, Volker

doi:10.1093/epolic/eix001

Cited by 60 publications

(61 citation statements)

References 14 publications

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“…Another related strand is the literature on the trade effects of sanctions, which have been shown to be important in, among others, the cases of South Africa (Evenett, 2002), Germany when it comes to capital flows (Besedeš, Goldbach, & Nitsch, 2017, Iran (Haidar, 2017) and Russia (Crozet & Hinz, 2016;Oja, 2015). 9 Oja (2015) focused on Russia's counter-sanctions using product-level data from the Baltic states; his results support the rather lukewarm overall impact of sanctions originating from the Ukraine crisis.…”

Section: Gullstrandmentioning

confidence: 99%

“…Hence, trade deflection reflects the efficiency of sanctions, since the cost of sanctions on the target economy falls when it could find other markets. Besedeš, Goldbach, and Nitsch (2017), Crozet and Hinz (2016), Evenett (2002) and Haidar (2017) all investigated the importance of both trade destruction and deflection using firm-level data, but in very different settings and with different results. Evenett (2002) and Haidar (2017) found evidence of a strong trade deflection, which mitigated the impact of sanctions directed towards South Africa and Iran, respectively.…”

Section: The Impact Of Sanctionsmentioning

confidence: 99%

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What goes around comes around: The effects of sanctions on Swedish firms in the wake of the Ukraine crisis

Gullstrand

2020

World Economy

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This study uses the sanctions imposed on and by Russia in 2014 as an exogenous shock on Swedish firms. The results suggest that the total short‐run cost of these sanctions on the Swedish economy amounted to around 1 billion SEK in 2013 prices, which implies a rather limited impact (around 0.025% of the Swedish GDP). The sanction effects were, however, highly asymmetric, and the direct effect on firms exporting banned products to Russia was a 70% drop in exports to Russia and an increased probability of exiting this market with 0.6 units. The indirect effects on nonbanned products were a 36% drop in sales and an increased probability of exiting of around 0.2 units. The disruption on the Russian market also created ripple effects outside this market, which was manifested in a 20% drop in the domestic production of banned products, a 12% drop in sales on markets outside Russia and a new export pattern. These negative ripple effects were also found to be pronounced in firms with their core products exposed to these sanctions, in firms with financial distress and in regions with a relatively low level of labour productivity.

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Section: Gullstrandmentioning

confidence: 99%

Section: The Impact Of Sanctionsmentioning

confidence: 99%

What goes around comes around: The effects of sanctions on Swedish firms in the wake of the Ukraine crisis

Gullstrand

2020

World Economy

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“…For instance, Haidar () showed that two‐thirds of Iranian exports were deflected to non‐sanctioning countries after trade sanctions by Western countries. For similar reasons, international financial sanctions can also distort cross‐border capital flows as shown by Besedes, Goldbach, and Nitsch (). Applying a differences‐in‐differences approach, they found that European financial sanctions significantly reduced direct financial flows with the sanctioned country, and they also led to evasions as capital flows increased among European countries and the major trading partners of sanctioned countries which were assumed to be more likely to serve as intermediaries.…”

Section: Literature Reviewmentioning

confidence: 82%

Anti‐dumping duty circumvention through trade rerouting: Evidence from Chinese exporters

Liu

Shi

2018

World Economy

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We study the evasion of US anti‐dumping duties by some Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the US Customs during the period of 2002–06, we find that US anti‐dumping actions against China lead to a stronger positive correlation between US imports from third countries and Chinese exports to the same third countries. Such a positive correlation is more pronounced for the products subject to anti‐dumping duties (treatment groups) than similar products not subject to these duties (control groups). The evidence is stronger for less‐differentiated products whose certificates of origins are easier to be modified and is stronger for third countries where the rerouting cost is low. These findings are consistent with a trade rerouting story, rather than a simple story of trade diversion (i.e., increase in some third countries' imports from China) and trade deflection (i.e., increase in some third‐country exports to the US). We also rule out other alternative stories, consider prior production in third countries and concurrent anti‐dumping actions against China or third countries, pay a particular attention to the many zero trade flows in the monthly level data and check the robustness to using an alternative control group and quarterly data, etc.

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“…6 Wang et al 2019. 7 Hatipoglu and Peksen 2018;Besedeš et al 2017;Mirkina 2018. 8 Hufbauer et al 1990 Although there exists a voluminous literature exploring the impact of economic sanctions on drivers of economic growth, it is quite surprising that there is a lack of empirical evidence on the direct impact of economic sanctions on economic growth.…”

Section: Introductionmentioning

confidence: 99%

Do Sanctions Cause Economic Growth Collapses?

Splinter

Klomp

2021

Nl Arms

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This chapter explores whether economic sanctions are able to trigger sudden economic growth collapses. The primarily aim of economic sanctions is to cause a political or behavioural change by imposing serious restrictions on important economic activities undertaken by the target country. In particular, the basic idea is that sanctions cause a large adverse and sudden shock to the target’s economy. It assumes that when this shock is severe enough, the target country is more willing to cooperate. The findings reported in this chapter clearly demonstrate that economic sanctions have a significant positive effect on the likelihood of a growth deceleration in the first three years after the first threat signals or actual imposition. It turns out that not all sanctions are equally successful in creating a sudden economic shock. In particular, trade sanctions, multilateral sanctions, and sanctions aimed at the business sector are the most harmful for the economy of the target country.

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You’re banned! The effect of sanctions on German cross-border financial flows

Cited by 60 publications

References 14 publications

What goes around comes around: The effects of sanctions on Swedish firms in the wake of the Ukraine crisis

What goes around comes around: The effects of sanctions on Swedish firms in the wake of the Ukraine crisis

Anti‐dumping duty circumvention through trade rerouting: Evidence from Chinese exporters

Do Sanctions Cause Economic Growth Collapses?

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