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

We study the impact of economic sanctions on international trade in the mining sector. We demonstrate that the gravity equation is well‐suited to model bilateral trade costs in mining and find that sanctions have been effective in impeding mining trade. Complete trade sanctions have reduced mining t...

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Bibliographic Details
Published inEconomic inquiry Vol. 60; no. 3; pp. 1038 - 1063
Main Authors Larch, Mario, Shikher, Serge, Syropoulos, Constantinos, Yotov, Yoto V.
Format Journal Article
LanguageEnglish
Published Huntington Beach Western Economic Association 01.07.2022
Subjects
Gravity
International trade
Mining
oil
Sanctions
structural gravity
trade effects
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Summary:We study the impact of economic sanctions on international trade in the mining sector. We demonstrate that the gravity equation is well‐suited to model bilateral trade costs in mining and find that sanctions have been effective in impeding mining trade. Complete trade sanctions have reduced mining trade by about 44% on average. We also document significant heterogeneity in the sanctions effects on mining trade across industries, sanction episodes/cases, depending on the sanctioning and sanctioned countries, the type of sanctions, and the direction of trade. We take a close look at the impact of recent sanctions on Iran and Russia.
Bibliography:Maggie Chen
The views expressed in this paper are strictly those of the authors and do not represent the opinions of the US International Trade Commission or of any of its Commissioners.
Managing Editor
ISSN:0095-2583
1465-7295
DOI:10.1111/ecin.13077