Quantifying the Impact of Economic Sanctions on International Trade in the Energy and Mining Sectors

44 Pages Posted: 16 Feb 2021

See all articles by Mario Larch

Mario Larch

University of Bayreuth - Faculty of Law, Business and Economics; University of Bayreuth; CESifo; Ifo Institute for Economic Research; GEP at the University of Nottingham; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Serge Shikher

U.S. International Trade Commission

Constantinos Syropoulos

LeBow College of Business, Drexel University

Yoto V. Yotov

Drexel University - Department of Economics & International Business

Date Written: 2021

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.

JEL Classification: F100, F130, F140, F500, F510, H500, N400

Suggested Citation

Larch, Mario and Shikher, Serge and Syropoulos, Constantinos and Yotov, Yoto, Quantifying the Impact of Economic Sanctions on International Trade in the Energy and Mining Sectors (2021). CESifo Working Paper No. 8878, Available at SSRN: https://ssrn.com/abstract=3784389 or http://dx.doi.org/10.2139/ssrn.3784389

Mario Larch (Contact Author)

University of Bayreuth - Faculty of Law, Business and Economics ( email )

Universit├Ątsstra├če 30
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University of Bayreuth ( email )

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Germany

CESifo ( email )

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Ifo Institute for Economic Research ( email )

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Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

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Serge Shikher

U.S. International Trade Commission ( email )

500 E Street SW
Washington, DC 20436
United States

Constantinos Syropoulos

LeBow College of Business, Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States
215-895-2792 (Phone)
215-895-6975 (Fax)

HOME PAGE: http://faculty.lebow.drexel.edu/SyropoulosC/

Yoto Yotov

Drexel University - Department of Economics & International Business ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

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