Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278844 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16146
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In this paper, we use a novel firm level dataset for Germany to investigate the effect of sanctions on export behaviour and performance of German firms. More specifically, we study the sanctions imposed by the EU against Russia in 2014 in response to the annexation of Crimea and Russia's countermeasures. We find a substantial negative effect on both the extensive and intensive margin of German exports. While the negative effects are strongest for firms exporting products subject to trade restrictions, we provide further evidence on the indirect effects of sanctions. Analysing the impact on broader measures of firm performance, we document that the cost of sanctions is heterogeneous across firms but overall modest. Our results reveal that the negative impact of the shock was concentrated primarily among a small number of firms that were highly dependent on Russia as an export market and those directly affected by the sanctions.
Subjects: 
sanctions
foreign policy
trade
firm behaviour
Germany
JEL: 
F1
F14
F51
L25
Document Type: 
Working Paper

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