Seminar in International Economics: Shooting down trade: Firm-level effects of embargoes

The Competence Centre for International Economics Research (FIW) kindly invites to participate in the Seminar in International Economics on the topic

Shooting down trade: Firm-level effects of embargoes

Presenter: Julian Hinz (Bielefeld University and Kiel Institute for the World Economy)
Discussant: Sonali Chowdhry (German Institute for Economic Research (DIW Berlin))

Abstract:
What are the effects of an embargo on affected producers? In this paper we document the supply side effects of the imposition of a sudden and complete embargo on specific products, as well as the response to the lifting of measures. Using Turkish customs data we first document the trade effects — the direct embargo impact, diversion effects to other destinations, as well as circumvention effects towards other products — on the intensive margin of firms. We then investigate the broader consequences of sanctions on firms’ domestic sales, purchases, and employment, uncovering significant and lasting impacts beyond trade outcomes. The study makes use of a well-defined quasi- natural experiment — the unexpected downing of a Russian military jet and the swift policy response in the form of an embargo — and various administrative datasets at the firm-level. We also propose a novel methodological approach to estimate firm-level effects of trade costs shocks, combining firm- and country-level data.

The presentation if available, will be posted after the event.

The seminar series is organised by the Vienna Institute for International Economic Studies (wiiw) in co-operation with FIW and the European University Institute. The seminar provides a forum for presentation and discussion of recent academic research in the field of international economics.