European Rust Belts. West-East Comparisons – and Beyond
International Conference, Regensburg, 7-8 May 2020
Call for Papers
Deadline for submissions: 15 August 2019
Conflict and Trade: Evidence from Russian-Ukrainian Trade Transactions
Ein Vortrag von Vasily Korovkin (CERGE-EI and UCLA Anderson School of Management) im Rahmen der Seminarreihe des AB Ökonomie am IOS.
Datum: 29. Januar 2019
Zeit: 13.30 Uhr
Ort: Leibniz-Institut für Ost-und Südosteuropaforschung (IOS), Landshuter Str. 4 (Raum 109)
This study presents novel evidence on the effects of conflict on trade in non-conflict areas. We examine the context of the ongoing Russian military intervention in Ukraine. In a difference-in-differences framework, we leverage a newly compiled firm-level panel with the universe of Ukrainian trade transactions from 2013 through 2016 and exploit substantial spatial variation in the ethnolinguistic composition of Ukrainian counties. The estimates suggest that Ukrainian firms from counties with fewer ethnic Russians experienced a deeper decline in trade with Russia. We argue that this result stems from increased inter-ethnic tensions and a differential rise in negative attitudes and beliefs about Russia. Evidence indicates that possible mechanisms include consumer boycotts of Russian products, reputational concerns of Ukrainian firms, and a breakdown of trust in contract enforcement. In contrast, we find no evidence for individual-level animosity between firms’ key decision makers or discrimination at the border. We also rule out that the differential decline in trade only arises from economic spillovers, such as refugee flows and destruction of supply chains with conflict areas.