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While the International Relations literature has long debated whether or not economic sanctions are an effective foreign policy tool, it neglects to empirically examine the damage sanctions impose on target economies. This study presents two theoretical explanations about the impact of sanctions on target countries’ economies, and collects extensive empirical data to test such theoretical connections in three areas: international trade; foreign direct investment; and foreign portfolio investment. A cross-national, time-series data analysis of 133 countries during the period from 1970 to 2005 reveals that regardless of the number of senders, the type of sanctions or the level of anticipated costs to the target and the sender, economic coercion damages none of the economic conditions of the target. This finding suggests that if the objective is to maximize economic pain in the sanctioned country, a sanctioning country should think twice before choosing economic coercion as its primary non-military strategy.

PurposeThis study proposes spatial origin-destination threshold Tobit to address spatial interdependence among bilateral trade flows while accounting for zero trade volumes.Design/methodology/approachThis model is designed to capture multiple forms of spatial autocorrelation embedded in “directional” trade flows. The authors apply this improved model to export flows among 32 Asian countries in 1990.FindingsThe empirical results indicate the presence of all three types of spatial dependence: exporter-based, importer-based and exporter-to-importer-based. After further considering multifaceted spatial correlation in bilateral trade flows, the authors find that the effect of conventional trade variables changes in a noticeable way.Research limitations/implicationsThis finding implies that the standard gravity model may produce biased estimates if it does not take spatial dependence into account.Originality/valueThis paper attempts to offer an improved model of the standard gravity model by taking spatial dependence into account.

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Purpose The purpose of this paper is to examine a curvilinear effect of legislative constraints on foreign debt. Design/methodology/approach A cross-sectional, time-series data analysis of 68 developing countries during the period from 1981 to 1999 was performed. Findings Foreign borrowing is most likely to increase at both low and high levels of legislative constraints, while it is most likely to decrease at moderate levels. Originality/value The paper is a first-cut empirical analysis of a curvilinear relationship between legislative constraints and foreign debt.