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The Real-Time Impact of the War on Russian Imports: A Synthetic Control Method Approach

Published online by Cambridge University Press:  17 May 2024

Michele Mancini ,
Francesco Paolo Conteduca Open the ORCID record for Francesco Paolo Conteduca [Opens in a new window]  and
Alessandro Borin
Michele Mancini*
Affiliation:
Banca d'Italia, Roma 00184, Italy
Francesco Paolo Conteduca
Affiliation:
Banca d'Italia, Roma 00184, Italy
Alessandro Borin
Affiliation:
Banca d'Italia, Roma 00184, Italy
*
Corresponding author: Michele Mancini; Email: michele.mancini@bancaditalia.it
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Abstract

In response to the invasion of Ukraine, the EU and most other advanced economies imposed extensive sanctions on Russia, intending to harm its production capabilities and hinder its economic activities by restricting its access to international trade and financial markets. This paper develops an empirical framework based on the synthetic control method to assess the impact of the war and the following sanctions on bilateral and sectoral exports to Russia almost in real time. The war and the following sanctions reduced aggregate exports to Russia by a third between March and December 2022, with the effects being stronger for sanctioning countries than for non-sanctioning ones, albeit with substantial country-level heterogeneity within each group. Exports to Russia in high-tech sectors – relatively more targeted by trade sanctions – have been disproportionately affected.

Keywords

synthetic controlRussiaSanctionsInternational tradeWar

JEL classification

F51: International Conflicts • Negotiations • Sanctions C54: Quantitative Policy Modeling F13: Trade Policy • International Trade Organizations
Type
Original Article
Information
World Trade Review , First View , pp. 1 - 15
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press on behalf of The Secretariat of the World Trade Organization

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Footnotes

†

Bank of Italy. The authors are grateful to Rinalds Gerinovics for his excellent research assistance and thank Riccardo Cristadoro and Giovanni Veronese, the editor Hylke Vandenbussche, and two anonymous referees for their useful comments and suggestions. The views expressed in this paper are solely those of the authors and do not necessarily reflect those of the Bank of Italy. The usual disclaimer applies.

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