dc.description.abstract | In this study, we have investigated whether the Chinese informal economic sanctions against Norwegian salmon had a negative effect on Norwegian salmon exporting firms’ financial performance. According to theory on international trade, economic sanctions distorts trade flows between countries and reduce the potential benefits and welfare gains from trade. Since trade takes place through firms, it is expected that firms will be negatively affected by economic sanctions. However, a firm’s opportunity to circumvent such market distortions could lead to a different conclusion.
We performed a fixed effects estimation to examine whether Norwegian salmon exporters were financially affected by the Chinese sanctions. Our results indicate that the Chinese sanctions had a negative financial impact on Norwegian salmon exporting firms, and that this negative effect was larger in the first three years of the sanction period. This can be explained by the different costs an exporting firm may face when economic sanctions are imposed. However, the observed long-run effect is close to zero, supporting the empirical literature stating that sanctions-busting activities are always likely.
The normative implications of our study stress the importance of countries developing and evaluating their exporting industries’ normative standards to prevent the potential criminalizing side effects of economic sanctions. However, firms are also responsible in these manners. Bribery and smuggling are criminalized because of their harmful consequences and informal economic sanctions are no legitimate excuse for criminal practices. | nb_NO |