Cheap talk? Financial sanctions and non-financial firms
dc.contributor.author
Besedeš, Tibor
dc.contributor.author
Goldbach, Stefan
dc.contributor.author
Nitsch, Volker
dc.date.accessioned
2021-03-16T21:32:20Z
dc.date.available
2021-03-14T05:25:38Z
dc.date.available
2021-03-16T21:32:20Z
dc.date.issued
2021-05
dc.identifier.issn
0014-2921
dc.identifier.issn
1873-572X
dc.identifier.other
10.1016/j.euroecorev.2021.103688
en_US
dc.identifier.uri
http://hdl.handle.net/20.500.11850/474337
dc.description.abstract
Sanctions restrict cross-border interactions and therefore, not only put political and economic pressure on the target country, but also adversely affect the sender country. This paper examines the effect of financial sanctions on the country imposing them. We analyze the business responses of German non-financial entities to the imposition of sanctions on 23 countries over the period from 1999 through 2014. Examining highly disaggregated, monthly data from the German balance of payments statistics, we find four main results. First, German financial activities with sanctioned countries are reduced after the imposition of sanctions. Second, firms doing business with sanctioned countries tend to be disproportionately large, often having alternative business opportunities. Third, firms affected by sanctions expand their activities with non-sanctioned countries, some of which display close trade ties to the sanctioned country. Fourth, we find no effect of sanctions on broader measures of firm performance such as employment or total sales. Overall, we conclude that the economic costs of financial sanctions to the sender country are limited. © 2021 Elsevier
en_US
dc.language.iso
en
en_US
dc.publisher
Elsevier
en_US
dc.subject
Sanction
en_US
dc.subject
Restriction
en_US
dc.subject
Cross-border transaction
en_US
dc.title
Cheap talk? Financial sanctions and non-financial firms
en_US
dc.type
Journal Article
dc.date.published
2021-02-16
ethz.journal.title
European Economic Review
ethz.journal.volume
134
en_US
ethz.journal.abbreviated
Eur. econ. rev.
ethz.pages.start
103688
en_US
ethz.size
17 p.
en_US
ethz.code.jel
JEL - JEL::F - International Economics::F2 - International Factor Movements and International Business::F20 - General
en_US
ethz.code.jel
JEL - JEL::F - International Economics::F3 - International Finance::F36 - Financial Aspects of Economic Integration
en_US
ethz.code.jel
JEL - JEL::F - International Economics::F3 - International Finance::F38 - International Financial Policy: Financial Transactions Tax; Capital Controls
en_US
ethz.code.jel
JEL - JEL::F - International Economics::F5 - International Relations, National Security, and International Political Economy::F51 - International Conflicts; Negotiations; Sanctions
en_US
ethz.identifier.scopus
ethz.publication.place
Amsterdam
en_US
ethz.publication.status
published
en_US
ethz.date.deposited
2021-03-14T05:25:48Z
ethz.source
SCOPUS
ethz.eth
yes
en_US
ethz.availability
Metadata only
en_US
ethz.rosetta.installDate
2021-03-16T21:32:32Z
ethz.rosetta.lastUpdated
2021-03-16T21:32:32Z
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true
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Journal Article [130870]