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Global Economic Sanctions, Global Bank Linkages And Information Asymmetry: An Evidence From Cross-Country Data

Author

Listed:
  • LE THANH HA

    (National Economics University, Giai Phóng, Ä Ã´ng Tâm, Hai Bà Tru’ng, Hà Ná»™i, Vietnam)

  • HOANG PHUONG DUNG

    (��Banking Academy of Vietnam, Chùa Bá»™c, Quang Trung, Ä á»™ng Ä a, Hà Ná»™i 100000, Vietnam)

  • PHAM HONG CHUONG

    (National Economics University, Giai Phóng, Ä Ã´ng Tâm, Hai Bà Tru’ng, Hà Ná»™i, Vietnam)

  • TO TRUNG THANH

    (National Economics University, Giai Phóng, Ä Ã´ng Tâm, Hai Bà Tru’ng, Hà Ná»™i, Vietnam)

  • TRAN THI LAN HUONG

    (National Economics University, Giai Phóng, Ä Ã´ng Tâm, Hai Bà Tru’ng, Hà Ná»™i, Vietnam)

Abstract

This paper investigates the effects of global economic sanctions (GESs) on global bank linkages (GBLs) by using 4,032 pairs of 66 countries during the 2001–2013 period. We use the structural gravity model combining with the rich database of the Global Sanction Data Base introduced by Felbermayr et al. [(2020). The global sanctions data base. European Economic Review, 129, 1–23]. Our empirical results show a negative association between the GESs and GBLs. The differential effects of GESs on the GBLs are conditional on the sanction types. Furthermore, the consequences of global sanctions become more severe for countries featuring higher information asymmetries, captured either by a high level of world uncertainty, an occurrence of crisis and shocks or by a weak institutional system. Our results are robust and reliable when we use an alternative measure of bank connections, and in the context of controlling the potential endogeneity of global sanction.

Suggested Citation

  • Le Thanh Ha & Hoang Phuong Dung & Pham Hong Chuong & To Trung Thanh & Tran Thi Lan Huong, 2021. "Global Economic Sanctions, Global Bank Linkages And Information Asymmetry: An Evidence From Cross-Country Data," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 21(03), pages 1-28, September.
    • Handle: RePEc:wsi:gejxxx:v:21:y:2021:i:03:n:s2194565921500111
    DOI: 10.1142/S2194565921500111
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