Sanctions, Product Comparative Advantage, and Exports of Sanctioned Countries

ABSTRACT Sanctions have long been widely used as political and economic tools, especially in recent years. While existing studies have examined the impact of sanctions on trade, product heterogeneity is often overlooked. Using data from the Global Sanctions Database, BACI Database, and other relevant sources, this paper investigates how sanctions differentially affect the exports of products with varying comparative advantages in sanctioned countries, based on bilateral export data from 1995 to 2019. The findings reveal that although sanctions generally reduce overall exports from sanctioned countries, products with comparative advantages are more resilient to adverse impacts and may even experience an increase in exports. Further analysis indicates that the effects of sanctions on exports are influenced by factors such as the type of sanctions, bilateral political relations, and product‐level trade complementarity. Mechanism analysis shows that sanctions increase trade costs and economic uncertainty in sanctioned countries, but comparatively advantaged products are more resilient to sanction shocks. This study highlights the heterogeneous effects of sanctions on product‐level exports in sanctioned countries, providing more precise and comprehensive theoretical and empirical references for trade policy formulation and corporate export strategies.