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Trade Effects of the Russia–Ukraine Conflict: Can Neutral Countries Really Fish in Troubled Waters?

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  • Hayakawa,Kazunobu
  • Kumagai,Satoru

Abstract

This study empirically investigates the trade effects of the 2022 Russia–Ukraine conflict. Specifically, we examine the impact of multinational enterprises (MNEs) from Western countries (sanctioning countries) on exports to Russia from neutral countries (non-sanctioning countries). To do this, we examine exports from 32 neutral countries. As a result, we found that, on average, neutral countries significantly increased their exports to Russia after its invasion, but the increase in exports to Russia was smaller in neutral countries with a greater presence of MNEs from Western countries. Furthermore, exports to Russia even decreased from neutral countries with the highest presence of MNEs from Western countries. This result implies that even for countries that did not impose any export restrictions, the export restrictions taken by Western countries can affect those countries’ exports to Russia.

Suggested Citation

  • 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).
    • Handle: RePEc:jet:dpaper:dpaper944
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic sanctions|Trade|Russia|Ukraine;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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