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Quantifying the Impact of Economic Sanctions on International Trade in the Energy and Mining Sectors

Author

Listed:
  • Mario Larch

    (University of Bayreuth)

  • Serge Shikher

    (United States International Trade Commission)

  • Costas Syropoulos

    (School of Economics Drexel University)

  • Yoto Yotov

    (School of Economics Drexel University)

Abstract

Capitalizing on the latest developments in the gravity literature, we utilize two new datasets on sanctions and trade to study the impact of economic sanctions on international trade in the mining sector, which includes oil and natural gas. We demonstrate that the gravity equation is well suited to model bilateral trade in mining and find that sanctions have been effective in impeding mining trade. Our analysis reveals that complete trade sanctions have reduced bilateral mining trade by about 44 percent on average. We also document the presence of significant heterogeneity in the effects of sanctions on mining trade across mining industries and across sanction episodes/cases, depending on the sanctioning and sanctioned countries, the type of sanctions used, and the direction of trade flows. We take a close look at the impact of recent sanctions on Iran and Russia.

Suggested Citation

  • Mario Larch & Serge Shikher & Costas Syropoulos & Yoto Yotov, 2021. "Quantifying the Impact of Economic Sanctions on International Trade in the Energy and Mining Sectors," School of Economics Working Paper Series 2021-9, LeBow College of Business, Drexel University.
    • Handle: RePEc:ris:drxlwp:2021_009
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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