Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267318 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10086
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Sanctions encompass a wide set of policy instruments restricting cross-border economic activities. In this paper, we study how different types of sanctions affect the export behaviour of firms to the targeted countries. We combine Danish register data, including information on firm-destination-specific exports, with information on sanctions imposed by Denmark from the Global Sanctions Database. Our data allow us to study firms' export behaviour in 62 sanctioned countries, amounting to a total of 453 country-years with sanctions over the period 2000-2015. Methodologically, we apply a two-stage estimation strategy to properly account for multilateral resistance terms. We find that, on average, sanctions lead to a significant reduction in firms' destination-specific exports and a significant increase in firms' probability to exit the destination. Next, we study heterogeneity in the effects of sanctions across (i) sanction types and sanction packages, (ii) the objectives of sanctions, and (iii) countries subject to sanctions. Results confirm that the effects of sanctions on firms' export behaviour vary considerably across these three dimensions.
Subjects: 
sanctions
firm exports
trade margins
JEL: 
F51
F13
F14
F52
Document Type: 
Working Paper
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