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The effects of heterogeneous sanctions on exporting firms: Evidence from Denmark

  • AbstractSanctions 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 behavior 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 behavior 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 behavior vary considerably across these three dimensions.

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Author:Ina C. JäkelORCiD, Søren Østervig, Erdal YalçinORCiDGND
Parent Title (English):Review of International Economics / Special Issue: Analyzing the Effects of Economic Sanctions
Publisher:John Wiley & Sons Ltd.
Place of publication:Hoboken, New Jersey
Document Type:Article
Year of Publication:2024
Release Date:2023/09/13
Tag:Sanctions; Geography, Planning and Development; International Trade
First Page:161
Last Page:189
Open Access?:Ja
Relevance:Peer reviewed Publikation in Master Journal List
Licence (German):License LogoCreative Commons - CC BY-NC - Namensnennung - Nicht kommerziell 4.0 International