SMU SOE Seminar Series (November 14, 2024): To Comply or Not to Comply: Understanding Neutral Country Supply Chain Responses to Russian Sanctions

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TOPIC:

TO COMPLY OR NOT TO COMPLY: UNDERSTANDING NEUTRAL COUNTRY SUPPLY CHAIN RESPONSES TO RUSSIAN SANCTIONS

ABSTRACT

We study how firms in neutral countries adjusted supply chains to Western sanctions on Russia. Firms with headquarters in sanctioning countries (sanctioning MNEs) reduced sanctioned product exportsto Russia, showing MNEs’ global influence. However, domestic firms in neutral countries increased sanctioned exports, weakening sanctions. Firms exporting more to sanctioning countries complied more, while those sourcing more inputs rerouted sanctioned products to Russia. Sanctioning MNEs expanded exports to both sanctioning and Russia-friendly countries, blending compliance and evasion. Financial sanctions led sanctioning MNEs to reduce imports from Russia in risky sectors. To improve sanctions, stronger secondary sanctions and MNE involvement are essential.

Keywords: Global Supply Chains, Geopolitical Risk, International Conflict.

JEL: F14, F63, O19.

Click here to view the CV.
Click here to view the paper.

PRESENTER

Haishi Li
Hong Kong University

RESEARCH FIELDS

International Trade
International Macroeconomics
Regional Economics

DATE:

14 November 2024 (Thursday)

TIME:

4.00pm - 5.30pm

VENUE:

Meeting Room 5.1, Level 5
School of Economics
Singapore Management University
90 Stamford Road
Singapore 178903

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