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on Confederation of Independent States |
| By: | Yuriy Gorodnichenko (University of California, Berkeley); Iikka Korhonen (Bank of Finland Institute for Emerging Economies); Elina Ribakova (Peterson Institute for International Economics) |
| Abstract: | This paper examines the impact of Russia's 2022 full-scale invasion of Ukraine on Russia's economy at a subnational, or "regional, " level. The analysis focuses on the regional disparities and convergence trends within Russia, driven by increased military spending and structural changes. The paper also explores the long-term implications of excessive reliance on military spending for regional development and economic efficiency. The findings suggest that there has been some convergence in regional wages and incomes during the war. However, the sustainability of this trend remains uncertain due to the misallocation of resources and the broader economic challenges facing Russia. The authors also find indirect evidence that regions with a strong military presence have experienced substantial income growth. |
| Keywords: | Russia, regional development, income, war |
| JEL: | E24 E65 F51 H72 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iie:wpaper:wp25-21 |
| By: | Egorov, Konstantin; Korovkin, Vasily; Makarin, Alexey; Nigmatulina, Dzhamilya |
| Abstract: | How effective are trade sanctions? We study the unprecedented sanctions imposed on Russia following February 2022, when Western countries banned exports accounting for 36% of Russia's prewar import value. Combining novel, hand-collected records of these sanctions with Russian customs data, firm balance sheets, domestic railway shipments, and government procurement contracts, we provide the most comprehensive analysis to date of the economic impact of trade sanctions on a target country. Using a difference-in-differences approach, we find that imports of sanctioned country-product varieties into Russia saw a sharp 55% decline after the war's onset. Although we document substantial rerouting through third countries, it has not fully offset the direct import losses: total imports of sanctioned products fell by 27% through 2023. Russian firms that had relied on soon-to-be-sanctioned imports experienced a 14% decline in output during the same period, not offset by competing firms or entrants. Similar declines are present for manufacturing and technology firms, and firms along the military supply chain. Affected firms have also experienced reduced government procurement sales and incurred additional losses when their buyers or suppliers were exposed to sanctions. Overall, our findings suggest that, contrary to widespread claims of ineffectiveness, export sanctions on Russia have had far-reaching adverse effects. |
| Keywords: | sanctions, international trade, Russia-Ukraine war, geoeconomics |
| JEL: | D22 D74 F14 F51 H56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitp:333959 |
| By: | Tamar Taralashvili (Department of Law, University of Urbino Carlo Bo, Italy); Alessandro Belmonte (Department of Economics and Social Sciences, Marche Polytechnic University, Italy.); Desiree Teobaldelli (Department of Law, University of Urbino Carlo Bo, Italy) |
| Abstract: | This study examines the impact of geopolitical shocks on public trust in international institutions, using the 2014 conflict in Ukraine as a quasi-natural experiment. Drawing on individual-level survey data from the Caucasus Barometer covering the period 2009-2019, we assess changes in trust in the European Union and the United Nations, as well as support for NATO membership, before and after the conflict among respondents in Georgia and Armenia. Although neither country was directly involved in the conflict, the crisis generated substantial geopolitical spillover throughout the South Caucasus. Employing a Difference-in-Differences design, we find a significant decline in trust toward these organizations in Georgia after 2014, a country characterized by a pro-Western foreign policy orientation and unresolved tensions with Russia, and therefore more exposed to the conflict's geopolitical consequences. In contrast, Armenia-more closely aligned with Russia and less directly affected-serves as a credible control case. We further examine how individual-level characteristics condition these effects. Our results show that individuals with a pro-Western identity, proxied by support for English as a mandatory school language, experienced smaller declines or even increases in institutional trust. Conversely, respondents with pro-Russian orientations exhibited significantly larger decreases in confidence. Overall, these findings highlight the polarizing effects of external geopolitical shocks and underscore the importance of cultural and political identity in shaping public attitudes toward international institutions in small states bordering Russia. |
| Keywords: | External threats, trust, international organizations, South Caucasus. |
| JEL: | D7 F52 F53 O19 Z13 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wpaper:502 |
| By: | Viktor Yarovyi |
| Abstract: | This research investigates the impact of tax policy changes on Ukraine's rural economy and local communities during the ongoing war. The study analyses how these reforms balance the need for revenue mobilization with the support of the agricultural sector. A mixed-methods approach combines quantitative fiscal data with qualitative insights from interviews with small-scale farmers. The findings reveal that, while wartime taxation has increased state revenue, its effects have been uneven and often disproportionate. |
| Keywords: | Taxation, War, Smallholder farmers, Local communities, Land tenure, Ukraine |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-105 |
| By: | Pierre-Louis Vézina; Cevat Giray Aksoy; Piotr Lewandowski |
| Abstract: | We examine business creation by Ukrainian refugees in Poland following the Russian invasion. We find that Ukrainians started 38, 833 firms in 2022–23, accounting for 7% of all registrations. Our survey shows that 58% of post-invasion Ukrainian founders are refugees, and cross-county regressions show that a 10% increase in adult male Ukrainian refugees is associated with a 2.7% increase in Ukrainian firm registrations. We then show that new Ukrainian businesses stimulate Polish entrepreneurship. Using a shift-share strategy based on refugee shocks and Ukrainians’ comparative advantage, we find that a 10% increase in Ukrainian registrations led to 2.3% more Polish firms. |
| Keywords: | migration, firms, entrepreneurship, multiplier |
| JEL: | F22 L26 O15 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:wpaper:wp072025 |
| By: | Gunter Deuber; Marcus How; Biljana Jovanovikj (The Vienna Institute for International Economic Studies, wiiw); Grzegorz W. Kolodko; Bernd Christoph Ströhm (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Poland at the crossroads – again by Grzegorz W. Kolodko Sometimes, instead of solving a problem, democracy complicates it even further. This is precisely what we are seeing in Poland, which – after the presidential election – is doomed to continue the cohabitation of a government and a president with opposing ideological and political orientations. In such conditions, it will be difficult for the Polish economy to follow a path of dynamic and sustainable development. US-Ukraine Mineral Resources Agreement Diplomatic coup in adverse circumstances? by Gunter Deuber and Marcus How The US-Ukraine raw minerals agreement was a diplomatic success for the Zelensky administration – arguably the best possible outcome in the current circumstances. The agreement is in the very early stages of implementation and is highly unlikely to become fully effective until a sustainable peace agreement is in place between Russia and Ukraine. It could serve as a blueprint for future bilateral resource-for-reconstruction deals, while other countries may follow suit in formalising their support for Ukraine through similar frameworks. The Global Gateway Initiative How the EU shapes up against China in the Western Balkans by Bernd Christoph Ströhm The EU’s Global Gateway Initiative which was established to compete with China’s Belt and Road Initiative, aims to improve digital connectivity, infrastructure and sustainable development in the EU’s backyard – including in the Western Balkan region. However, bureaucratic obstacles and a lack of political consensus have delayed its implementation. The EU runs the risk of a further loss of credibility and influence in the region if it does not carry through its projects under this ambitious initiative. Latest trends in global monetary policy and financial markets by Biljana Jovanovikj Late 2023 and early 2024 marked the beginning of a gradual shift toward monetary easing, as inflation in the advanced economies began moving closer to target and growth momentum softened. However, the outlook became significantly more uncertain in early 2025, following the imposition of US tariffs and the escalation of global trade tensions. The key question now is not only the pace and timing of further rate cuts, but also whether heightened geopolitical and trade-related risks will delay or even reverse the easing cycle in some countries. |
| Keywords: | nationalism, economic populism, presidential elections, Mineral Resources Agreement, economic and military aid, security guarantees, Global Gateway Initiative, Belt and Road Initiative, infrastructure investments, policy rates, inflation, yield curves |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:wii:mpaper:mr:2025-06 |
| By: | Onogwu, Daniel; Olushola, Adalumo |
| Abstract: | This study investigates the effects of geopolitical risk, foreign direct investment (FDI), exchange rate dynamics, and international sanctions on the sectors’ global value chains (GVCs) participation for the Russian economy. Panel data across eight selected sectors was used. Data were analyzed using descriptive and Difference-in-Difference method. The study finds no significant impact of geopolitical risks on sectoral GVC participation. This implies there is an evidence of short term resilience or perhaps internal substitution strategies. However, a rise in exchange rate (depreciation) significantly increase GVC forward participation. FDI as a percentage of GDP exhibit a positive but statistically weak influence on forward GVC participation, highlighting the partial effectiveness of investment-led integration under sanctions. Policy interventions on the treated sectors did not yield measurable gains in trade integration following sanctions. Stark disparities exist in the sectoral analysis. Capital-intensive and export-oriented sectors like petroleum and electricity recorded significantly higher GVC participation relative to wood, while textiles and food processing lagged behind, indicating evidence of vulnerabilities in low-tech and domestically dependent industries. It is recommended that policy meant to stabilize domestic currency and promote a competitive currency should be prioritized to maintain Russia’s GVC integration under sanctions. However, long term sustainability hinge on sector-specific strategies and her ability to restore foreign direct investment. |
| Keywords: | Difference-in-Differences; Economic Resilience; Exchange Rate; Geopolitical Risk; Global Value Chains (GVCs) |
| JEL: | E02 F15 |
| Date: | 2025–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127130 |
| By: | Vincent Chatellier (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | The global trade in animal products, excluding trade between European Union (EU) Member States, has grown significantly over the past two decades, reaching 226 billion euros in 2023. This represents approximately 17 % of total agricultural and agri-food trade. With a trade surplus of nearly 50 billion euros in 2024, the EU is the most export surplus region in the world for animal products. Despite the implementation of several free trade agreements, the EU's trade balance has improved markedly over the past twenty years, particularly thanks to dairy products and pork. While trade agreements with the United Kingdom and Canada have been beneficial to European trade, more restrictive measures were introduced in 2025 with Ukraine to curb a substantial rise in exports (notably for poultry) since the outbreak of the war. |
| Abstract: | Les échanges mondiaux de produits animaux, hors commerce entre les États membres de l'Union européenne (UE), ont fortement progressé au fil des deux dernières décennies pour atteindre 226 milliards d'euros en 2023, soit l'équivalent de 17 % du total des échanges de produits agricoles et agroalimentaires. Avec une balance commerciale proche de 50 milliards d'euros en 2024, l'UE est la zone la plus excédentaire au monde en produits animaux. En dépit de la mise en oeuvre de plusieurs accords de libre-échange, le solde commercial de l'UE s'est nettement amélioré au fil des deux dernières décennies grâce surtout aux produits laitiers et à la viande porcine. Si les accords commerciaux signés avec le Royaume-Uni et le Canada ont été favorables au commerce européen, des mesures plus restrictives ont été appliquées en 2025 avec l'Ukraine pour contenir une hausse importante des exportations de ce pays depuis le déclenchement de la guerre, notamment en viande de volaille. |
| Keywords: | EU, Animal products, Imports, Exports, International trade, UE, Produits Animaux, Importations, Exportations, Commerce international |
| Date: | 2025–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05430115 |
| By: | Mr. Apostolos Apostolou; Fillipo Gori; Thomas Kroen; Salem M Nechi; Subi Suvetha Velkumar |
| Abstract: | This paper investigates the impact of geoeconomic fragmentation on trade flows in the Caucasus and Central Asia (CCA) and Middle East and North Africa (MENA) regions. Amidst ongoing conflicts, security threats, the spike in global economic uncertainty, and evolving consumer sentiments, these regions face intricate challenges that necessitate agile policy responses. The analysis presents three illustrative scenarios, examining the effects of targeted trade restrictions, trade diversion, and neutral stances on exports and economic output. The findings of these illustrative scenarios highlight the critical importance of reducing trade barriers, enhancing infrastructure, and improving regulatory environments to navigate the risks and opportunities posed by geoeconomic fragmentation. These measures are essential for fostering resilience and promoting sustainable growth in the affected regions. |
| Keywords: | Geoeconomic Fragmentation; Trade DiversionTrade Policy; Infrastructure Investment Regulatory Constraints;Caucasus and Central Asia (CCA); Middle East and North Africa(MENA); Trade Barriers; Geopolitical Uncertainties |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/267 |
| By: | Soonhyung Shim (Korea Institute for Industrial Economics and Trade) |
| Abstract: | South Korea’s defense exports have continued to grow steadily, driven by the strong performance of major programs such as the FA-50 light attack aircraft and the second export batch of the K2 main battle tank (MBT). At the same time, supply chain risks have intensified due to US–China trade tensions, rising raw material prices, and embargoes on Russian inputs. These pressures risk longer delivery delays and weaker export competitiveness. In response to similar challenges, the United States, in its National Defense Industrial Strategy (NDIS), outlined concrete steps to strengthen supply chain resilience and cooperation with allies.<p> In the European Union, the European Defence Industrial Strategy (EDIS) emphasizes deeper intra-regional integration and greater self-sufficiency in Europe. Both frameworks share a common understanding: vulnerabilities within the defense supply chain translate directly into security risks. This insight carries important implications for Korea.<p> Against this backdrop of fragmenting global supply chains, we analyzed the supply chain for Korea’s military aircraft and identified major risk factors. For the FA-50 program, we classified and evaluated 52 defense contractors based on systems specialty (avionics, propulsion, fuselage, and components) and evaluated their financial performance, dependence on imports, and reliance on Korea’s main systems integrator, Korea Aerospace Industries (KAI). The results of the analysis point to the existence of relatively stable supply chains for avionics and propulsion systems, but small average firm size and low productivity levels are key challenges facing the supply chain for major components and fuselage systems. Moreover, the propulsion and components segments are notably reliant on imports (31 and 25.4 percent, respectively), underscoring the need to localize supply and secure alternative channels.<p> In this paper we also perform a comparative case study contrasting the FA-50 program with Italy’s M-346/FA program. This analysis shows that the FA-50 benefits from a stable and reliable procurement network. But this network is heavily concentrated in the United States and a small group of countries; the supply chain for the M-346/FA is more resilient thanks to its more diversified sourcing.<p> The results of the analysis carry three strategic implications for Korea’s military aircraft industry.<p> First, there is a clear need to pursue technological self-reliance in avionics and propulsion systems by localizing major links in the supply chain. Second, the supply chain features a large number of small and medium-sized enterprises (SMEs); efforts are needed to enhance the competitiveness of these firms. Finally, it is critical to expand the participation of fuselage and components suppliers in global value chains. Integrating these priorities within a coherent supply chain governance framework is essential to stabilizing production, safeguarding technological resilience, and enhancing Korea’s competitiveness in the global defense market. |
| Keywords: | defense; defense industry; South Korea; defense exports; armaments; weapons manufacturing; arms trade; defense manufacturing; FA-50; K-2; military aircraft; Main Battle Tank; MBT |
| JEL: | H56 H57 F52 L64 |
| Date: | 2025–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:021955 |
| By: | Margaryan, Tamar; Yedigaryan, Knarik |
| Abstract: | Armenia's information-communication-technology (ICT) exports climbed to US $1.1 billion in 2023, a 43 percent year-on-year surge that places the small Caucasus republic among the world's ten fastest-growing tech exporters. This paper asks how Armenia's digital capacities can be operationalised in the European Union's Global Gateway to deliver secure, sustainable, and inclusive connectivity between Europe and the Global South. We combine gravity-model trade simulations, layer-three latency mapping, venture-capital deal analytics, and 27 expert interviews to identify three high-impact leverage points: Trusted Data Corridors that scale the 2024 EU4Digital cross-border e-ID pilot; Dual-use SpaceTech Hubs building on Armenia's first national satellite and Starlink rollout; Diaspora-backed Innovation Funds such as Formula VC II (US $30 million, 35-40 deals). A risk-adjusted Monte-Carlo model suggests that a €180 million Armenian Digital Gateway Facility (ADGF) could unlock €1.2 billion in additional trade and 9 000 ICT jobs by 2030 while cutting data-transit latency to Frankfurt by 32 ms (73 Ç 41 ms). Comparative analysis with Estonia's e-Residency programme demonstrates the viability of small-state digital-hub strategies. A five-year implementation road-map and policy recommendations on cyber-resilience, skills mobility, and ESG governance offer a replicable template for other middle-income innovation hubs. |
| Keywords: | digital connectivity, Global Gateway, Armenia, EU-Global-South relations, trusted data corridors, ICT exports |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:opodis:333908 |
| By: | Oh, Saera; Lim, Sunghun |
| Keywords: | International Development |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343735 |