ERF 26th Annual Conference
Shooting Down Trade: The Impact of Russian Sanctions on Turkish Exports and Exporters
Topic
F5. International Relations, National Security, and International Political Economy
F1. Trade
F. International Economics
On 24 November 2015, Turkish military shot down a Russian fighter jet near the Syrian-Turkey border as it violated Turkish airspace for about 16 seconds. Russia retaliated by imposing an embargo on 17 agricultural HS-6 level products from Turkey. This paper evaluates the impact of these sanctions on Turkish exports and firms. Using restrictive customs and firm-level data, we estimate the effect of these sanctions on the exports towards Russia, for embargoed and non- embargoed products. We estimate a total trade loss of USD 5.8bn for Turkish exports, 84% of which stemming from non-embargoed products. Moreover, the adverse effects of sanctions persisted for some products even after these sanctions were lifted. Our firm-level analysis shows that firms trading with Russia directed part of their exports to other foreign markets and to the Turkish domestic market.