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Not-so-innocent bystanders: Trade with neighbors of sanctioned countries

Author

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  • Daria Suprunenko

    (Osnabrueck University)

Abstract

Geographic neighbors of sanctioned countries (targets) may suffer from indirect effects of sanctions or benefit by helping targets circumvent restrictions. I study the effects of sanctions on trade among neighbors and targets using data from BACI for 2002–2022 and separately accounting for export of sensitive goods: arms, dual use goods and machinery. I find that export of dual use goods (in value) and machinery (in value and weight) from benevolent neighbors to targets increases when sanctions are in place. Additionally, I show that the weight of arms exported by neighbors to Iran, as well as value of dual use goods and weight of machinery exported to Russia were significantly higher with sanctions in place suggesting that their neighbors were not innocent bystanders.

Suggested Citation

  • Daria Suprunenko, 2024. "Not-so-innocent bystanders: Trade with neighbors of sanctioned countries," IEER Working Papers 123, Institute of Empirical Economic Research, Osnabrueck University.
    • Handle: RePEc:iee:wpaper:wp0123
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    More about this item

    Keywords

    Trade sanctions; extraterritorial effects; trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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