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Reducing trade with Russia: Sanctions vs. reputation

Author

Listed:
  • Juan de Lucio

    (Universidad de Alcalá. Pza. San Diego, s/n, 28801, Alcalá de Henares (Spain).)

  • Raúl Mínguez

    (Cámara de Comercio de España and Universidad Antonio de Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).)

  • Asier Minondo

    (Corresponding author. Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain).)

  • Francisco Requena

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

Abstract

The invasion of Ukraine in February 2022 led the European Union to impose a wide range of economic sanctions on Russia. Parallel to this process, many multinational firms, due to reputational concerns, voluntarily decided to suspend their activities in Russia. This paper quantifies the impact of trade sanctions and the decision of firms to suspend activities on Spanish exports and imports with Russia. Using an event study methodology, we find that the decision of firms to suspend activities in Russia contributed to the reduction in exports and imports by 26% and 43%, respectively, while sanctions contributed by 9% and 21%, respectively. These figures highlight that firms’ actions to protect their reputation can significantly complement sanctions in reducing the amount of trade with target countries.

Suggested Citation

  • Juan de Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2024. "Reducing trade with Russia: Sanctions vs. reputation," Working Papers 2406, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:2406
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    sanctions; reputation; Russian invasion of Ukraine; firm-level exports and imports; Spain;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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