Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/140902
Authors: 
BesedeŇ°, Tibor
Goldbach, Stefan
Nitsch, Volker
Year of Publication: 
2016
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 12/2016
Abstract: 
This paper examines the effect of financial sanctions on cross-border capital flows. While sanctions can be expected to hinder international transactions, thereby putting political and economic pressure on a target country, we study the patterns of adjustment in bilateral financial relationships after the imposition of sanctions along various dimensions. Our analysis is based on highly disaggregated, monthly data from the German balance of payments statistics for the period from 2005 through 2014. During this time, Germany imposed financial sanctions on 20 countries; two of these sanctions have been lifted. Applying a differences-in-differences approach, we find two key results. First, financial sanctions have a strong and immediate negative effect on cross-border financial flows, with flows reduced in either direction. Second, sanctions imposed by the European Union alone, and therefore only enforced by their member countries instead of the United Nations, are possibly partly evaded.
Subjects: 
sanction
restriction
cross-border transaction
JEL: 
F20
F36
F38
ISBN: 
978-3-95729-250-6
Document Type: 
Working Paper

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