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Quantifying the impact of economic sanctions on international trade in the energy and mining sectors

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  • Mario Larch
  • Serge Shikher
  • Constantinos Syropoulos
  • Yoto V. Yotov

Abstract

We study the impact of economic sanctions on international trade in the mining sector. We demonstrate that the gravity equation is well‐suited to model bilateral trade costs in mining and find that sanctions have been effective in impeding mining trade. Complete trade sanctions have reduced mining trade by about 44% on average. We also document significant heterogeneity in the sanctions effects on mining trade across industries, sanction episodes/cases, depending on the sanctioning and sanctioned countries, the type of sanctions, and the direction of trade. We take a close look at the impact of recent sanctions on Iran and Russia.

Suggested Citation

  • Mario Larch & Serge Shikher & Constantinos Syropoulos & Yoto V. Yotov, 2022. "Quantifying the impact of economic sanctions on international trade in the energy and mining sectors," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1038-1063, July.
    • Handle: RePEc:bla:ecinqu:v:60:y:2022:i:3:p:1038-1063
    DOI: 10.1111/ecin.13077
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    3. Ning Meng & Feicheng Wang, 2023. "Navigating Trade Policy Shocks: How Firms Reallocate Exports in Third Markets," CESifo Working Paper Series 10752, CESifo.
    4. Hayakawa,Kazunobu & Kumagai,Satoru, 2024. "Trade Effects of the Russia–Ukraine Conflict: Can Neutral Countries Really Fish in Troubled Waters?," IDE Discussion Papers 944, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Morad Bali & Thanh T. Nguyen & Lincoln F. Pratson, 2024. "Impacts of EU Sanctions Levied in 2014 on Individual European Countries' Exports to Russia: Winners and Losers," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 50(2), pages 154-194, April.
    6. Rodolfo G. Campos & Benedikt Heid & Jacopo Timini, 2024. "The Economic Consequences of Geopolitical Fragmentation: Evidence from the Cold War," CESifo Working Paper Series 11057, CESifo.
    7. Felbermayr, Gabriel & Morgan, T. Clifton & Syropoulos, Constantinos & Yotov, Yoto V., 2021. "Understanding economic sanctions: Interdisciplinary perspectives on theory and evidence," European Economic Review, Elsevier, vol. 135(C).
    8. Daria Suprunenko, 2024. "Not-so-innocent bystanders: Trade with neighbors of sanctioned countries," IEER Working Papers 123, Institute of Empirical Economic Research, Osnabrueck University.
    9. Hayakawa,Kazunobu & Kumagai,Satoru, 2022. "The trade effect of economic sanctions: evidence from the 2022 Russia-Ukraine conflict," IDE Discussion Papers 857, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. Mario Larch & Jeff Luckstead & Yoto V. Yotov, 2021. "Economic Sanctions and Agricultural Trade," CESifo Working Paper Series 9410, CESifo.
    11. Simon A. B. Schropp & Christian Lau & Olim Latipov & Kornel Mahlstein, 2022. "Quantifying the impact of the latest U.S. tariff sanctions on Russia - a sectoral analysis," Working Papers 2022-08, The George Washington University, Institute for International Economic Policy.
    12. Fatemeh Rahimzadeh & Hamed Pirpour & Bahman P. Ebrahimi, 2022. "The impact of economic sanctions on the efficiency of bilateral energy exports: the case of Iran," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.
    13. Farag, Markos & Zaki, Chahir, 2021. "On the Determinants of Trade in Natural Gas: A Political Economy Approach," EWI Working Papers 2021-8, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    14. Raul Caruso & Maria Cipollina, 2023. "The Effect of Economic Sanctions on World Trade of Mineral Commodities. A Gravity Model Approach from 2009 to 2020," DISCE - Quaderni del Dipartimento di Politica Economica dipe0034, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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