Trade Effects of the Russia–Ukraine Conflict in Thailand: The Impacts of Sanctions on Trade from a Neutral Country

This study empirically investigates the trade effects of the 2022 Russia–Ukraine conflict. Specifically, we investigate how foreign firms in Thailand changed exports to Russia during the Russia-Ukraine conflict. Although Thailand has not formally endorsed either side and has not sanctioned Russia, foreign firms may be subject to their home countries’ restrictions and decrease their exports to Russia. To examine this hypothesis, we explore the firm-level rankings in terms of export values in 2021, 2023, and 2024. Our findings can be summarized as follows. Foreign firms from countries on Russia’s list of unfriendly countries are more likely to terminate their exports to Russia compared with local Thai firms. At the same time, the export ranking of firms that continue exporting to Russia did not change. These findings indicate that firms made a change in their extensive margin rather than their intensive margin. These results were especially notable for manufacturing firms. Therefore, even if a country maintains a “neutral” position between the two parties, it reduces its exports to one party by terminating exports by foreign firms of the other party.