IDEAS home Printed from https://ideas.repec.org/p/aim/wpaimx/1638.html
   My bibliography  Save this paper

Israel's Open-Secret Trade

Author

Abstract

This paper uncovers and quantifies Israel’s exports to countries that ban trade with Israel. Israel exported a total of $6.4 billion worth of merchandise to boycott countries between 1962 and 2012, and most of this trade is illicit, i.e. not recorded by the importers. We find that electronic exports to Malaysia account for the lion’s share of this trade but it also includes a wide array of products from footwear to fruit and vegetables. Our estimates suggest Israel’s exports to these countries would be 10 times larger without the boycott. On top of providing further evidence on the unintended consequences of unilateral trade bans, this paper provides a case study on the role of politics in international trade.

Suggested Citation

  • Lorenzo Rotunno & Pierre-Louis Vézina, 2016. "Israel's Open-Secret Trade," AMSE Working Papers 1638, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:1638
    as

    Download full text from publisher

    File URL: http://www.amse-aixmarseille.fr/sites/default/files/_dt/2012/wp_2016_-_nr_38.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
    2. Jamal Ibrahim Haidar, 2017. "Sanctions and export deflection: evidence from Iran," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 319-355.
    3. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    4. Guy Michaels & Xiaojia Zhi, 2010. "Freedom Fries," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 256-281, July.
    5. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    6. Stefano DellaVigna & Eliana La Ferrara, 2010. "Detecting Illegal Arms Trade," American Economic Journal: Economic Policy, American Economic Association, vol. 2(4), pages 26-57, November.
    7. Caruso Raul, 2003. "The Impact of International Economic Sanctions on Trade: An Empirical Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 9(2), pages 1-36, April.
    8. Heilmann, Kilian, 2016. "Does political conflict hurt trade? Evidence from consumer boycotts," Journal of International Economics, Elsevier, vol. 99(C), pages 179-191.
    9. Raymond Fisman & Shang-Jin Wei, 2009. "The Smuggling of Art, and the Art of Smuggling: Uncovering the Illicit Trade in Cultural Property and Antiques," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 82-96, July.
    10. Philip I. Levy, 1999. "Sanctions on South Africa: What Did They Do?," American Economic Review, American Economic Association, vol. 89(2), pages 415-420, May.
    11. Raymond Fisman & Yasushi Hamao & Yongxiang Wang, 2014. "Nationalism and Economic Exchange: Evidence from Shocks to Sino-Japanese Relations," The Review of Financial Studies, Society for Financial Studies, vol. 27(9), pages 2626-2660.
    12. C. Umana Dajud, 2013. "Political Proximity and International Trade," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 283-312, November.
    13. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2009. "Economic Sanctions Reconsidered, 3rd Edition (paper)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4129, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laurent Didier, 2020. "The Impact of Conflict on Trade in Services: A Sector-Level Analysis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(1), pages 34-48, March.
    2. Beverelli, Cosimo & Ticku, Rohit, 2022. "Reducing tariff evasion: The role of trade facilitation," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 534-554.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthieu Crozet & Julian Hinz, 2020. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(101), pages 97-146.
    2. Crozet, Matthieu & Hinz, Julian & Stammann, Amrei & Wanner, Joschka, 2021. "Worth the pain? Firms’ exporting behaviour to countries under sanctions," European Economic Review, Elsevier, vol. 134(C).
    3. Matthieu Crozet & Julian Hinz, 2016. "Collateral Damage: The impact of the Russia sanctions on sanctioning countries’ exports," Working Papers 2016-16, CEPII research center.
    4. Hinz, Julian, 2017. "The cost of sanctions: Estimating lost trade with gravity," Kiel Working Papers 2093, Kiel Institute for the World Economy (IfW Kiel).
    5. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    6. Julian Hinz & Elsa Leromain, 2016. "Politics of Global Value Chains," Working Papers 1026, Economic Research Forum, revised Jul 2016.
    7. Felbermayr, Gabriel & Kirilakha, Aleksandra & Syropoulos, Constantinos & Yalcin, Erdal & Yotov, Yoto V., 2020. "The global sanctions data base," European Economic Review, Elsevier, vol. 129(C).
    8. Dizaji, S.F. & Lis, P. & Murshed, S.M. & Zweiri, M., 2020. "What the political economy literature tells us about blockades and sanctions," ISS Working Papers - General Series 130655, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    9. Changyuan Luo & Shiyi Sun & Guanghua Wan, 2021. "The impact of political relations on international trade: China–Philippines island dispute as a quasi‐natural experiment," The World Economy, Wiley Blackwell, vol. 44(11), pages 3422-3441, November.
    10. repec:wsr:wpaper:y:2017:i:174 is not listed on IDEAS
    11. Jerg Gutmann & Matthias Neuenkirch & Florian Neumeier, 2024. "Do China and Russia undermine Western sanctions? Evidence from DiD and event study estimation," Review of International Economics, Wiley Blackwell, vol. 32(1), pages 132-160, February.
    12. Piotr Lukaszuk, 2021. "You can smuggle but you can't hide: Sanction evasion during the Ukraine crisis," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 71(01), pages 73-125, December.
    13. Ferdinand Rauch & Matthias Beestermoller, 2014. "A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain," Economics Series Working Papers 718, University of Oxford, Department of Economics.
    14. Fuchs, Andreas, 2016. "China’s Economic Diplomacy and the Politics-Trade Nexus," Working Papers 0609, University of Heidelberg, Department of Economics.
    15. Li, Haoran & Wan, Xibo & Zhang, Wendong, 2020. "How do Firms Respond to Political Tensions? Evidence from Chinese Food Importers," ISU General Staff Papers 202011250800001118, Iowa State University, Department of Economics.
    16. Yan, Jiaqiang & Zhou, Yonghong, 2021. "Economic return to political support: Evidence from voting on the representation of China in the United Nations," Journal of Asian Economics, Elsevier, vol. 75(C).
    17. Li, Yuhua & Jian, Ze & Tian, Wei & Zhao, Laixun, 2021. "How political conflicts distort bilateral trade: Firm-level evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 233-249.
    18. Ariaster B. Chimeli & Rodrigo R. Soares, 2017. "The Use of Violence in Illegal Markets: Evidence from Mahogany Trade in the Brazilian Amazon," American Economic Journal: Applied Economics, American Economic Association, vol. 9(4), pages 30-57, October.
    19. Gern, Klaus-Jürgen & Hauber, Philipp & Kooths, Stefan & Stolzenburg, Ulrich, 2017. "Weltkonjunktur im Winter 2017 - Weltwirtschaft weiter im Aufschwung [World Economy Winter 2017 - World economic upswing continues]," Kieler Konjunkturberichte 37, Kiel Institute for the World Economy (IfW Kiel).
    20. Kim, Kyoochul, 2020. "Finding Loopholes in Sanctions: Effects of Sanctions on North Korea’s Refined Oil Prices," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 42(4), pages 1-25.
    21. Du, Yingxin & Ju, Jiandong & Ramirez, Carlos D. & Yao, Xi, 2017. "Bilateral trade and shocks in political relations: Evidence from China and some of its major trading partners, 1990–2013," Journal of International Economics, Elsevier, vol. 108(C), pages 211-225.

    More about this item

    Keywords

    trade policy; Israel; illegal trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aim:wpaimx:1638. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gregory Cornu (email available below). General contact details of provider: https://edirc.repec.org/data/amseafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.