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On the heterogeneous effects of sanctions on trade

Author

Listed:
  • Gabriel Felbermayr
  • Constantinos Syropoulos
  • Erdal Yalcin
  • Yoto V. Yotov

Abstract

With the help of a new, comprehensive sanctions database and utilizing the latest developments in the structural gravity literature, we estimate the effects of economic sanctions on international trade. We demonstrate that the average effects of sanctions hide significant heterogeneity depending on the type of sanctions considered, their duration, objectives and sender types. We also zoom in on the sanctions against Iran. We find that their effects are significant but also widely heterogeneous across sanctioning countries, even within the European Union, and depend on the direction of trade. We complement the aggregate analysis with estimates for 170 sectors, showing that sanctions have been effective in decreasing bilateral trade at the sectoral level while the effects vary significantly across sectors and across complete versus partial trade sanctions. Les effets hétérogènes des sanctions imposées sur le commerce. À l'aide d'une nouvelle base de données complète sur les sanctions et en utilisant les plus récentes constatations de la littérature sur la gravité structurelle, nous estimons les effets des sanctions économiques sur le commerce international. Nous démontrons que les effets moyens des sanctions cachent une grande hétérogénéité selon le type de sanction envisagé, sa durée, ses objectifs et le type d'émetteur. Nous nous concentrons également sur les sanctions imposées à l'Iran. Nous constatons que leurs effets sont importants, mais aussi très hétérogènes selon le pays imposant les sanctions, même au sein de l'Union européenne, et qu'ils dépendent de la direction du commerce. Nous complétons l'analyse globale par des estimations dans 170 secteurs, montrant que les sanctions ont été efficaces pour diminuer le commerce bilatéral à l'échelon sectoriel, mais que les effets varient considérablement entre les secteurs et entre les sanctions commerciales totales et partielles.

Suggested Citation

  • Gabriel Felbermayr & Constantinos Syropoulos & Erdal Yalcin & Yoto V. Yotov, 2025. "On the heterogeneous effects of sanctions on trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 58(1), pages 247-280, February.
    • Handle: RePEc:wly:canjec:v:58:y:2025:i:1:p:247-280
    DOI: 10.1111/caje.12754
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    References listed on IDEAS

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    1. Peter H. Egger & Mario Larch & Yoto V. Yotov, 2022. "Gravity Estimations with Interval Data: Revisiting the Impact of Free Trade Agreements," Economica, London School of Economics and Political Science, vol. 89(353), pages 44-61, January.
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    13. T. Clifton Morgan & Constantinos Syropoulos & Yoto V. Yotov, 2023. "Economic Sanctions: Evolution, Consequences, and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 37(1), pages 3-30, Winter.
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    Cited by:

    1. Rok Spruk, 2026. "Confrontation with the West and Long-Run Economic and Institutional Outcomes: Evidence from Iran," Papers 2602.03231, arXiv.org.
    2. Ninon Moreau-Kastler, 2025. "No blood in my mobile: regulating foreign suppliers," Working Papers 037, EU Tax Observatory.
    3. Ohyun Kwon & Arne Nagengast & Jangsu Yoon & Yoto Yotov, 2026. "From Imposition to Lifting: Estimating the Effects of Sanctions Over Their Lifecycle," Working Papers 202606, Center for Global Policy Analysis, LeBow College of Business, Drexel University.
    4. Muharrem Cevik, 2026. "Sanctions and Creative Trade: Evidence from Russia," Working Papers 202601, Center for Global Policy Analysis, LeBow College of Business, Drexel University.

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