MetaTOC stay on top of your field, easily

Identifying the Causal Impacts of International Sanctions on Agricultural Trade: An Event Study Approach

Journal of Agricultural Economics

Published online on

Abstract

["Journal of Agricultural Economics, EarlyView. ", "\nABSTRACT\nInternational sanctions have been increasingly deployed for political and economic reasons. While the consequences of sanctions on political and macro‐economic outcomes are well‐analysed, rigorous evaluations of the causal impacts of sanctions on the agriculture and food (agri‐food) trade remain limited. We obtain the causal estimates of sanctions' impact on agri‐food trade by utilising samples that have been threatened with but not subject to sanctions to construct the counterfactual of the sanctioned sample. Exploiting an event study approach to analyse data from 154 countries over the period 1960–2016, we find that international sanctions mostly resulted in modest and short‐lived declines in the total agri‐food trade of sanctioned countries as opposed to the counterpart of countries under sanction threats. Trade volumes declined substantially for beef, pork, roots, dairy and fruit products. The decline in the exports of agri‐food commodities resulting from international sanctions was more significant relative to the drop in imports. The study also reveals that the impact of sanctions on agri‐food trade depends partially on the type of the sanction and on the sanction imposer. While the differences in the impact of sanctions across agri‐food commodities largely reflect the fact that the commodities where there are stronger impacts are those produced more in countries subject to sanctions, future studies incorporating analytical tools from industrial organisation may provide more nuanced insights on why and how the trade of differential agri‐food commodities was impacted by sanctions so differently.\n"]