Two new peer-reviewed research articles by CEFAU researchers Ina Jäkel and Saskia Meuchelböck shed light on an important question: What happens to our own exporting firms when we impose sanctions on other countries? Although the decision is made at the political level, it is often the firms that must adapt to new conditions and navigate a changed reality.

The findings show that exporters typically reduce their exports to the affected countries - even when their products are not directly subject to the sanctions. The impact on a firm's economic performance largely depends on how exposed the firm is to the sanctioned markets. Therefore, it is important to have a clear picture of which firms and sectors are potentially affected - even when sanctions only target specific individuals, entities, or products.

Similarly, it may also be beneficial to enhance existing export-support initiatives, such as advisory services and guidance for companies, when implementing new sanctions to reduce indirect effects.

Today, we are publishing a CEFAU Research Brief based on Ina's and Saskia's articles. The Research Brief provides perspective and describes the findings from peer-reviewed research. Here are three key take-aways:

1. Sanctions also affect the exports of products that are not directly covered by the sanctions
2. Sanctions come in many different forms—from export bans to travel restrictions—and their effects vary across countries depending on the type and purpose of the sanctions
3. The impact of sanctions on the economic performance of exporters largely depends on how exposed they are to the sanctioned markets.