Abstract
Evidence suggests that firms frequently over-comply with U.S. sanctions—a process also known as “de-risking.” We argue that U.S. enforcement of its economic sanctions has contributed to this phenomenon to the extent that we can observe a systematic relationship between U.S. sanctions enforcement and third-party trade with U.S. sanction targets. Specifically, we theorize that, the greater the frequency and severity of sanctions enforcement penalties imposed by the U.S. against sanctions violators, the more third-party trade with U.S. sanction targets will decline. Analyzing data from 2003 to 2015, we find that U.S. sanctions enforcement actions correlate with significant declines in dyadic trade between third-party states and U.S. sanctions targets, even when enforcement actions target parties external to that dyad. This suggests that the U.S.’s enforcement of its sanctions magnifies the harm that U.S. sanctions inflict on target economies.
Get full access to this article
View all access options for this article.
References
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
