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Influence of Russian Sanctions on Agricultural Trade between Russia and the European Union

Author

Listed:
  • Stanislava Kontsevaya

    (Economics Department, Czech University of Life Sciences, Prague, Kamycka 129,165 2 Czech Republic)

  • Luboš Smutka

    (Head of the Department of Finance and Trade, Czech University of Life Sciences, Prague, Kamycka 129,165 2 Czech Republic)

Abstract

The European Union is Russia's largest agricultural trading partner, and this cooperation has a long history. The imposition of sanctions on certain product groups in 2014 significantly affected trading relations. A gravity model helps us to understand and evaluate the characteristics of agricultural trade between countries. The aim of the research is to compare the agricultural trade flow between Russia and the European Union for the period 2000-2017, find some regularity, and estimate the influence of Russian sanctions using regression models for each European country and for particular types of agricultural products. The dataset sample consists of 12,096 observations and 29 countries. The gravity model of the dependence on Russia of imports and exports from each European country takes into account such variables as GDP (US dollar), distance (km) and dummies (a common border, common language, common history and seaport availability). The findings of the research are as follows: the classical gravity model is feasible for imports from Russia to EU countries. Thus, the smaller the distance between countries, the greater the trade flow between them, and the larger the GDP of both countries, the greater the trade flow between them. In addition, the gravity model is feasible not only for countries, but also for the particular group of products. The results of the cluster analysis show the impact of sanctions on each of 24 groups of products imported into Russia (not just those products that have been under Russian sanctions). It is possible to say that the impact of sanctions is deeper than previously thought.

Suggested Citation

  • Stanislava Kontsevaya & Luboš Smutka, 2020. "Influence of Russian Sanctions on Agricultural Trade between Russia and the European Union," Acta Universitatis Bohemiae Meridionalis, University of South Bohemia in Ceske Budejovice, Faculty of Economics, vol. 23(1), pages 13-26.
    • Handle: RePEc:boh:actaub:v:23:y:2020:i:1:p:13-26
    DOI: 10.2478/acta-2020-0002
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    References listed on IDEAS

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    1. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos E., 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics.
    2. Koo, Won W. & Karemera, David & Taylor, Richard, 1994. "A gravity model analysis of meat trade policies," Agricultural Economics, Blackwell, vol. 10(1), pages 81-88, January.
    3. Won W. Koo & David Karemera & Richard Taylor, 1994. "A gravity model analysis of meat trade policies," Agricultural Economics, International Association of Agricultural Economists, vol. 10(1), pages 81-88, January.
    4. Lubos SMUTKA & Jindrich SPICKA & Natalia ISHCHUKOVA & Richard SELBY, 2016. "Agrarian import ban and its impact on the Russian and European Union agrarian trade performance," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(11), pages 493-506.
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    Cited by:

    1. Luboš Smutka & Josef Abrhám, 2022. "The impact of the Russian import ban on EU agrarian exports," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(2), pages 39-49.

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    More about this item

    Keywords

    gravity model; international trade; panel data;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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