sanctions · Julian Hinz

Trade Sanctions: Evidence From Russia

Julian Hinz — Fri, 23 Oct 2026 00:00:00 +0000

Number of exported products by French firms following the imposition of sanctions against Russia in 2022.

We review the economics of trade sanctions and provide new macro and micro evidence with the Russia 2014 and 2022 episodes as central case studies. On the macro side, we calibrate a multi-country, multi-sector general-equilibrium trade model with input–output linkages to quantify welfare effects under alternative coalition and intensity scenarios. Relative to 2014, the 2022 measures imposed substantially larger costs on Russia (about –2.6% of real income) while the average cost for EU/UK senders remained modest (around –0.1%), with larger losses in highly exposed small economies. Coalitions amplify pressure on the target at limited additional cost for most senders; hypothetical extensions bound sanctions potential (e.g., global participation or embargoes). On the micro side, using French customs data (monthly firm–product–destination flows, 2021–2023) and a triple-difference design, we show that exports to Russia fell by roughly three quarters after February 2022. The adjustment is dominated by the extensive margin, with smaller but significant intensive-margin declines among continuing firms. Targeted products contracted far more than non-targeted ones (dual-use goods most severely), and we document diversion consistent with rerouting to nearby non-sanctioning countries. We further discuss financial channels that propagate losses beyond listed goods, limits of ``smart'' sanctions when governments shield strategic firms, and political responses—including rally-around-the-flag effects.

Shooting down trade: Firm-level effects of embargoes

Uğur Aytun — Sat, 01 Mar 2025 00:00:00 +0000

Imposition and lifting effect of the embargo.

In November 2015, Turkey’s unexpected downing of a Russian military jet in Syria prompted Russia to impose a swift and comprehensive embargo on specific Turkish exports. This study leverages this quasi-natural experiment to estimate both the immediate and longer-term effects of the imposition and subsequent lifting of these sanctions. Utilizing administrative data encompassing all Turkish exporters, we first examine the impact on trade at the firm level, assessing the direct effects of the embargo, the redirection of trade to alternative markets, and the circumvention through other products. Second, we investigate broader repercussions on domestic operations, including firms’ sales, procurement, and employment. Our findings show that while the embargo caused immediate and substantial declines in exports of affected products to Russia, firms partially mitigated these losses through trade diversion. Although relative trade patterns normalized post-sanctions, absolute trade values remained subdued. The analysis reveals that affected firms experienced declines in domestic sales and supplier relationships, with temporary disruptions in employment. However, most negative effects dissipated following the embargo’s removal, except for some persistent reductions in procurement and supplier links, likely linked to the persistent lower trade volumes even after the embargo ended. These results contribute to the understanding of sanctions’ broader economic implications and the resilience of firms facing trade disruptions.

To Russia with Love? The Impact of Sanctions on Regime Support

Robert Gold — Thu, 12 Sep 2024 00:00:00 +0000

Sanctions impact on regional exports.

Do economic sanctions affect internal support of sanctioned countries’ governments? To answer this question, we focus on the sanctions imposed on Russia in 2014 and identify their effect on voting behavior in both presidential and parliamentary elections. On the economic side, the sanctions significantly hurt Russia’s foreign trade — with regional variance. We use trade losses caused by the sanctions as measure for regional sanctions exposure. For identification, we rely on a structural gravity model that allows us to compare observed trade flows to counterfactual flows in the absence of sanctions. Difference-in-differences estimations reveal that regime support significantly increases in response to the sanctions, at the expense of voting support of Communist parties. For the average Russian district, sanctions exposure increases the vote share gained by President Putin and his party by 13 percent. Event studies and placebo estimations confirm the validity of our results.

Brothers in arms: The value of coalitions in sanctions regimes

Sonali Chowdhry — Mon, 15 Apr 2024 00:00:00 +0000

Incurred and imposed welfare costs of the 2014 Russia sanctions.

This paper examines the impact of coalitions on the economic costs of the 2012 Iran and 2014 Russia sanctions. By estimating and simulating a quantitative general equilibrium trade model under different coalition setups, we (i) dissect welfare losses for sanctions senders and target; (ii) compare prospective coalition partners; (iii) investigate “optimal” coalitions that maximise payoff from sanctions; (iv) provide bounds for sanctions potential, i.e. the maximum welfare change attainable when sanctions are scaled vertically up to an embargo, and horizontally up to a global regime. Relative to unilateral action, we find that coalitions magnify welfare losses imposed while their impact on domestic welfare loss incurred depends on the design and sectoral dimension of sanctions. Hypothetical cooperation of large developing economies such as China additionally raises the deterrent force of coalitions. Additionally, we quantify transfers that equalise welfare losses across coalition members to further demonstrate asymmetries in the relative economic burden of sanctions. In all scenarios, we implement a novel Bayesian bootstrap procedure that generates confidence bands for simulation outcomes.

Coalitions for Sanctions Heighten Costs for Russia but Burden of Implementation Should Be Shared among Member Countries

Sonali Chowdhry — Thu, 01 Feb 2024 00:00:00 +0000

Countries increasingly form alliances to collectively impose sanctions. However, the resulting impact of such coordination remains unclear. Analyzing the 2014 wave of sanctions against Russia over 400,000 simulations with a quantitative trade model, this report demonstrates that multilateral cooperation through coalitions simultaneously reduced domestic welfare losses incurred from sanctions and intensified welfare losses imposed on Russia. Results also reveal significant disparities within the coalition, with Russia sanctions placing relatively high economic costs on Baltic nations that can be mitigated through a burden-sharing program. Hypothetical cooperation by emerging economies like China is also shown to substantially raise the force of sanctions against Russia.

The research behind this report is Brothers in Arms: The Value of Coalitions in Sanctions Regimes.

Navigating Trade Restrictions

Vasily Astrov — Thu, 01 Feb 2024 00:00:00 +0000

This report focuses on Russia’s adaptation in its commodity exports during 2023, amidst ongoing international sanctions. It examines the shifts in export and maritime shipping patterns, emphasizing coal, crude oil, and liquefied natural gas, and their redirection towards alternative, non-sanctioning markets. The analysis details Russia’s efforts to maintain its commodity exports by leveraging new maritime routes and - possibly - spoofing Automatic Identification System (AIS) signals to avoid detection of ship-to-ship transfers of oil.

Blowback: The Effect of Sanctions on Democratic Elections

Matthieu Crozet — Thu, 07 Dec 2023 00:00:00 +0000

Change in vote share for Le Pen and exports of embargoed products by destination.

Sanctions are meant to coerce political adversaries through economic measures. However, evidence for their effectiveness is scarce. In this paper we assess the impact of sanctions on a democracy — France — by studying the electoral consequences of the sanctions and countersanctions imposed between Russia and Western countries. Contrary to most of the existing literature we find clear evidence for exposure to the sanctions to cause an increase in the vote share for pro-Russian (and far-right) candidates during the French 2017 presidential election. Locally, the impact on voting is substantial. Back-of-the-envelope calculations indicate that about 16,300 votes for the main far-right candidate can be directly attributed to the sanctions' impact. This is the total number of votes cast in a medium-sized French city. It is however not nearly enough to have affected the outcome of the election at the national level.

Sanctions coalitions: Stronger together

Sonali Chowdhry — Sun, 30 Oct 2022 00:00:00 +0000

Bearing the cost of politics: Consumer prices and welfare in Russia

Julian Hinz — Tue, 08 Mar 2022 00:00:00 +0000

Evolution of average prices of embargoed and non-embargoed products.

In August 2014, the Russian Federation implemented an embargo on select food and agricultural imports from Western countries in response to previously imposed economic sanctions. In this paper we quantify the effect of this embargo on consumer prices and welfare in Russia. We provide evidence for the direct effect on monthly consumer prices with a difference-in-differences approach. The embargo caused prices of embargoed goods to rise by up to 7.7% – 14.9% in the short run and by on average 2.6% – 8.1% until at least 2016. The results further suggest the shock was transmitted to non-embargoed sectors through domestic input-output linkages. We then construct a general equilibrium Ricardian model of trade with input-output linkages and goods that are tradable, non-tradable or embargoed. The model-based counterfactual analysis predicts the overall price index in Russia to have increased by 0.33% and welfare to have declined by 1.84% due to the embargo.

Firms’ exporting behaviour to countries under sanctions

Julian Hinz — Fri, 05 Mar 2021 00:00:00 +0000

Worth the pain? Firms' exporting behaviour to countries under sanctions

Matthieu Crozet — Sun, 31 Jan 2021 00:00:00 +0000

Evolution of number of firms in face of sanctions.

How do exporting firms react to sanctions? Specifically, which firms are willing — or capable — to serve the market of a sanctioned country? We investigate this question for four sanctions episodes using monthly data on the universe of French exporting firms. We draw on recent econometric advances in the estimation of dynamic fixed effects binary choice models. We find that the introduction of new sanctions in Iran and Russia significantly lowered firm-level probabilities of serving these sanctioned markets, while the (temporary) lifting of the U.S. sanctions on Cuba and the removal of sanctions against Myanmar had no or only small trade-inducing effects, respectively. Additionally, the impact of sanctions is very heterogeneous along firm dimensions and by case particularities. Firms that depend more on trade finance instruments are more strongly affected, while prior experience in the sanctioned country considerably softens the blow of sanctions, and firms can be partly immune to the sanctions effect if they are specialized in serving “crisis countries”. Finally, we find suggestive evidence for sanctions avoidance by exporting indirectly via neighboring countries.

Friendly Fire: The Trade Impact of the Russia Sanctions and Counter-Sanctions

Matthieu Crozet — Thu, 12 Sep 2019 00:00:00 +0000

Monthly relative losses of exports to Russia.

Economic sanctions are a frequently used instrument of foreign policy. In a diplomatic conflict they aim to elicit a change in the policies of a foreign government by damaging their economy. Sanctions, however, are also likely to affect the sanctioning country. This paper evaluates these costs, in terms of export losses, for the diplomatic crisis between the Russian Federation and 37 countries over the conflict in Ukraine that started in 2014. We first gauge the impact of the sanctions regime using a traditional trade framework and quantify the trade losses in a general equilibrium counterfactual analysis. Losses for the Russian Federation are, as can be expected, significant, amounting US$ 53 billion or 7.4 % of predicted total exports from 2014 until the end of 2015. Western sanctioning countries, however, have also been impacted with an estimated loss of US$ 42 billion, 0.3 % of their total exports. Interestingly, we find that the bulk of the impact stems from products that are not directly targeted by Russian retaliation, an effect that we coin friendly fire — an unintended, self-inflicted cost for Western sanctioning countries. We investigate the underlying mechanism at the firm level using French customs data. Results indicate that the drop of Western exports has not been driven by a change in Russian consumers’ preferences, but mainly by an increase in country risk affecting international transactions with Russia.

The Cost of Sanctions: Estimating Lost Trade with Gravity

Julian Hinz — Wed, 01 May 2019 00:00:00 +0000

Economic sanctions are a frequently used tool of foreign policy. Constraining trade ﬂows towards or from the target country is supposed to coerce its government into changing certain policies. However, sanctions constitute an obstacle to trade, thereby affecting ﬂows of all countries, including those of sanctioning countries themselves. I gauge the global impact of three recent sanctions regimes using a structural gravity framework and quantify the “lost trade” in a general equilibrium counterfactual exercise. Each of the episodes, sanctions against Iran, Russia and Myanmar, are instructive in their own way, due to the different nature of bilateral trade and severity of measures applied.

Russia’s and the EU’s Sanctions. Economic and Trade Effects, Compliance and the Way Forward

Elisabeth Christen — Fri, 15 Sep 2017 00:00:00 +0000

Friendly fire: Zu den Handelsauswirkungen der Russlandsanktionen

Julian Hinz — Sun, 01 Jan 2017 00:00:00 +0000

Handels- und Finanzsanktionen sind ein häufig verwendetes Instrument der Außenpolitik. Sie sollen der Wirtschaft des Ziellandes durch Barrieren im Waren-, Kapital- und Personenverkehr schaden, um damit politischen Druck auszuüben. In ihrer modernen Form (“Smart Sanctions”) versprechen sie eine maßgeschneiderte Maßnahme mit der Möglichkeit der Feinabstimmung und einer schnellen Rückkehr zum normalen Zustand. Während die Erfolgsbilanz von Sanktionen hinsichtlich der politischen Ziele unklar ist, haben sie jedoch für private Akteure in den sanktionierenden Ländern einen Preis, der oft übersehen wird. Durch die Beschränkung grenzüberschreitender Transaktionen schaden sie inländischen Unternehmen, die im Zielland tätig sind, was derzeit in Bezug auf das Sanktionsregime gegenüber der Russischen Föderation von besonderem Interesse ist.

The research behind this box is Friendly fire: The trade impact of the Russia sanctions and counter-sanctions.

Auswirkungen der Wirtschaftssanktionen der EU und Russlands auf Wertschöpfung und Beschäftigung in Österreich und der EU

Julian Hinz — Thu, 15 Dec 2016 00:00:00 +0000

Collateral damage: The impact of the Russia sanctions on sanctioning countries’ exports

Julian Hinz — Tue, 05 Jul 2016 00:00:00 +0000

Sanctions et embargos : quels impacts sur le commerce de la france vers la russie ?

Julian Hinz — Fri, 15 Apr 2016 00:00:00 +0000