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Working Paper Special
Appendix and Tables

US Economic Sanctions: Their Impact on Trade, Jobs, and Wages

© Institute for International Economics.

 

Appendix 1: Countries in Data Set

Algeria Hungary Paraguay
Angola Iceland Peru
Argentina India Philippines
Armenia Indonesia Poland
Australia Iran Portugal
Austria Iraq Romania
Belgium Ireland Russia
Bolivia Israel Saudi Arabia
Brazil Italy Serbia/Montenegro
Bulgaria Japan Singapore
Canada Kenya Somalia
Chile South Korea South Africa
China Kuwait Spain
Colombia Libya Sudan
Cuba Lithuania Surinam
Czechoslovakia Macedonia Sweden
Denmark Malawi Switzerland
Ecuador Malaysia Syria
Egypt Mexico Taiwan
El Salvador Morocco Thailand
Ethiopia Myanmar (Burma) Tunisia
Finland Nepal Turkey
France Netherlands United Kindgom
Gambia New Zealand United States
Germany Nicaragua Uruguay
Ghana Nigeria Venezuela
Greece North Korea Vietnam
Guatemala Norway Zimbabwe
Haiti Pakistan  
Hong Kong Panama  

 

Table 1: Glossary for sanctions variables

Dummy Variable Explanation
LIM Limited financial, cultural, travel, or trade restrictions
MOD Broader trade or financial restrictions
EXT Comprehensive trade and financial restrictions
   
LIM1*2 Limited sanctions lifted one to two years ago
MOD1*2 Moderate sanctions lifted one to two years ago
EXT1*2 Extensive sanctions lifted one to two years ago
   
LIM3*4 Limited sanctions lifted three to four years ago
MOD3*4 Moderate sanctions lifted three to four years ago
EXT3*4 Extensive sanctions lifted three to four years ago

 

Table 2: 1985 Results, All Countries
Variable Estimated
coefficient		 Standard
error		 t-statistic  
C (constant) -9.334 0.438 -21.306 -21.306
         
Standard gravity model variables        
LGNP 0.770 0.015 52.117 *
LGNPPC 0.209 0.018 11.907 *
LDIST -0.779 0.035 -22.525 *
ADJ 0.507 0.156 3.244 *
LANG 0.488 0.075 6.492 *
BLOC 0.491 0.170 2.889 *
         
Sanctions dummy variables        
LIM -0.326 0.121 -2.692 *
MOD -0.787 0.295 -2.672 *
EXT -2.424 0.432 -5.611 *
LIM1*2 0.209 0.528 0.397  
MOD1*2 -0.514 0.646 -0.796  
EXT1*2 na na na  
LIM3*4 -0.135 0.335 -0.403  
MOD3*4 0.691 0.644 1.073  
EXT3*4 -1.597 0.744 -2.148 **

* Significant at the 99 percent confidence level or better.
**Significant at the 95 percent confidence level or better.

Number of observations 2,472
Standard error of regression 1.286
Adjusted R2 0.691

na means there are no observations in the sample with this type of sanction.

 

Table 3: 1990 Results, All Countries
Variable
Estimated
coefficient
Standard
error
 t-statistic  
C (constant) -8.871 0.406 -21.856  
         
Standard gravity model variables        
LGNP 0.794 0.014 56.352 *
LGNPPC 0.086 0.015 5.611 *
LDIST -0.704 0.034 -20.547 *
ADJ 0.718 0.149 4.825 *
LANG 0.620 0.073 8.503 *
BLOC 0.523 0.148 3.541 *
         
Sanctions dummy variables        
LIM -0.520 0.124 -4.205 *
MOD -0.238 0.135 -1.762 **
EXT -2.288 0.371 -6.163 *
LIM1*2 -0.986 1.280 -0.771  
MOD1*2 -0.783 1.280 -0.612  
EXT1*2 -0.878 0.905 -0.970  
LIM3*4 0.600 0.573 1.047  
MOD3*4 na na na  
EXT3*4 na na na  

* Significant at the 99 percent confidence level or better.

**Significant at the 95 percent confidence level or better using a one-tailed test.

Number of observations 2,628
Standard error of regression 1.279
Adjusted R2 0.721

na means there are no observations in the sample with this type of sanction.

 

Table 4: 1995 Results, all countries
Variable Estimated
coefficient		 Standard
error		 t-statistic  
C (constant) -8.050 0.360 -22.352  
         
Standard gravity model variables        
LGNP 0.811 0.013 62.286 *
LGNPPC 0.091 0.014 6.317 *
LDIST -0.856 0.032 -26.401 *
ADJ 0.570 0.142 4.018 *
LANG 0.787 0.069 11.479 *
BLOC 0.175 0.128 1.362  
         
Sanctions dummy variables        
LIM -0.148 0.119 -1.246  
MOD -0.374 0.139 -2.691 *
EXT -2.510 0.227 -11.053 *
LIM1*2 -0.156 0.148 -1.058  
MOD1*2 -0.990 0.613 -1.615 ***
EXT1*2 -0.233 0.244 -0.955  
LIM3*4 0.653 0.283 2.309 **
MOD3*4 na na na  
EXT3*4 na na na  

* Significant at the 99 percent confidence level or better.
**Significant at the 95 percent confidence level or better.
***Significant at the 90 percent confidence level or better.

Number of observations 2,714
Standard error of regression 1.225
Adjusted R2 0.761

na means there are no observations in the sample with this type of sanction.

 

Table 5: Impact of Sanctions on Bilateral Merchandise Trade

 
Estimated percentage
change in trade
 
Level of sanctions imposed in base year 1985 1990 1995 Average
All countries, exports plus imports        
Limited (LIM) -27.8 -40.6 -13.8a -27.4
Moderate (MOD) -54.5 -21.2 -31.2 -35.6
Extensive (EXT) -91.1 -89.9 -91.9 -91.0
OECD countries, exports only        
Limited (LIM) na na -21.5 na
Moderate (MOD) na na -33.1 na
Extensive (EXT) na na -78.0 na

a. The coefficient on this variable was not statistically signficant at the usual levels.
na means no regression was run for OECD exports in this year.

 

Table 6. 1995 Results, OECD countries, exports only

Variable Estimated
coefficient		 Standard
error		 t-statistic
C (constant) -9.816 0.381 -25.774
Standard gravity model variables
LGNP 0.817 0.013 63.237 *
LGNPPC 0.131 0.017 7.968 *
LDIST -0.850 0.031 -27.387 *
ADJ 0.342 0.146 2.348 **
LANG 0.836 0.079 10.559 *
BLOC -0.012 0.097 -0.119
Sanctions dummy variables
LIM -0.242 0.093 -2.595 *
MOD -0.402 0.155 -2.592 *
EXT -1.513 0.230 -6.586 *
LIM1*2 -0.048 0.178 -0.217
MOD1*2 na na na
EXT1*2 0.470 0.308 1.525
LIM3*4 0.703 0.252 2.792 *
MOD3*4 na na na
EXT3*4 na na na

* Significant at the 99 percent confidence level or better.

**Significant at the 95 percent confidence level or better.

Number of observations 2,118
Standard error of regression 1.055
Adjusted R2 0.812

na means there are no observations in the sample with this type of sanction.

 

Table 7: 1995 Results, US Exports

Variable Estimated
coefficient		 Standard
error		 t-statistic  
C (constant) -12.448 3.219 -3.867  
         
Standard gravity model variables        
LGNP 0.856 0.088 9.772 *
LGNPPC 0.137 0.117 1.172  
LDIST -0.643 0.319 -2.013 **
ADJ 0.550 1.394 0.395  
LANG 0.588 0.287 2.046 **
BLOC 0.412 1.050 0.393  
Sanctions dummy variables        
LIM -0.234 0.332 -0.705  
MOD -1.138 0.514 -2.214 **
EXT -3.452 0.631 -5.470 *
LIM1*2 -0.208 1.046 -0.199  
MOD1*2 na na na  
EXT1*2 1.880 1.098 1.712 ***
LIM3*4 0.322 0.591 0.545  
MOD3*4 na na na  
EXT3*4 na na na  

* Significant at the 99 percent confidence level or better.
**Significant at the 95 percent confidence level or better.
***Significant at the 90 percent confidence level or better.

Number of observations 84
Standard error of regression 1.009
Adjusted R2 0.809

na means there are no observations in the sample with this type of sanction.

 

Table 8: US exports lost due to economic sanctions in place in 1995

Target
country		 Sanctions level
1995		 Actual exports
1995		 Estimated reduction
in US exports using
coefficients for
OECD exportse		 Estimated reduction
in US exports using
coefficients for
US exportsf		 Estimated reduction
in US exports using
coefficients for
US exportsf
Angola MOD 260 128.3 551  
Bulgaria LIM 132 36 36 *
Burma MOD 16 8 34  
China LIM 11,749 3,213 3,213 *
Cubaa EXT 6 1,094 1,094  
Czech LIM 556 152 152 *
Ecuador LIM 1,538 421 421 *
Guatemala LIM 1,652 452 452 *
Hungary LIM 296 81 81 *
India LIM 3,296 901 901 *
Indonesia LIM 3,395 929 929 *
Iran EXT 238 842 2,526  
Iraqb EXT - 1,992 1,992  
Libyab EXT - 1,513 1,513  
Nigeria LIM 602 165 165 *
North Koreac EXT 5 185 185  
Pakistan MOD 935 461 1,983  
Peru LIM 1,775 485 485 *
Poland LIM 776 212 212 *
Romania LIM 256 70 70 *
Russia LIM 2,651 725 725 *
Serbia &
Montenegrod		 EXT - 675 675  
Sudan MOD 44 22 93  
Syria MOD 223 110 473  
The Gambia LIM 7 2 2 *
Vietnam LIM 253 69 69 *
           
TOTAL   14,942 19,031  

a. Estimated 1995 exports to Cuba calculated as (US share of 1995 OECD exports to the Dominican Republic)
multiplied by (1995 OECD exports to Cuba)
b. Estimated 1995 exports to Iraq, Libya calculated as (US exports in last year before sanctions) multiplied by
(world exports 1995/world exports last year before sanctions).
c. Estimated 1995 exports to N. Korea calculated as (US share of 1995 OECD exports to S. Korea) multiplied by
(1995 OECD exports to N. Korea)
d. Estimated 1995 exports to Serbia calculated as estimated 1995 US exports to all of Yugoslavia less observed
exports to Croatia and Bosnia Herzegovina.
e. Calculated as [(actual 1995 exports)/exponent of coefficient from Table 6)] - actual 1995 exports.
f. Calculated as [(actual 1995 exports)/exponent of coefficient from Table 7)] - actual 1995 exports.
*The limited (LIM) coefficient for US exports-only in 1995 (Table 7) is not statistically significant, so the OECD
exports-only coefficient is used in its place.