Trade And Politics:Does Russia Trade Less After Sanctions?

This paper empirically examines the relationship between sanctions and the international trade of Russian Federation.I use panel data for Russian trade with 42 of its main trade partners over the period 2000-2017.I use the gravity model of trade,with multilateral resistance terms represented by fixed effects to investigate the relationship between political determinants such as sanctions or trade volume.In addition,the difference-in-difference method(DID)is used for the discrepancy impact of sanctions on a'treatment group of countries'against a'control group of countries'.The results suggest that sanctions significantly and negatively relate with Russian international trade flow.Furthermore,sensitivity analyses are verified applying different control variables,time intervals and estimation methods.The results showed that political treatment and trade size retained the same negative association.