The impact of financial sanctions: The case of Iran

Abstract

This study provides a detailed analysis of the impact of financial sanctions on publicly traded companies. We consider the effect of imposing and lifting sanctions on the target country's traded equities and examine the differences in the reaction of politically connected firms and those without such connections. The paper focuses on Iran due to (1) its sizable financial markets, (2) imposition of sanctions of varying severity and duration on private and state-owned companies, (3) the significant presence of politically connected firms in the stock market, and (4) the unique event of the 2015 nuclear deal, resulting in fairly rapid lifting of a sizable portion of imposed sanctions. We find that sanctions affect politically connected firms more than ordinary firms, have lasting negative effects on profitability ratios, and that politically connected firms stock prices bounce back more slowly after removal of sanctions. Firms targeted by financial sanctions decrease their leverage and increase their cash holding to manage their perceived increase in risk profile.

Human capital efficiency, performance, market, and volatility timing of asian equity funds during COVID-19 outbreak

“…The Chinese funds are unique in terms of their ownership structure that is sometimes dominated by the State and can influence the performance (Hutson et al 2019 ). Similarly, the sanctions on Iran impact the investment paradigm (Ghasseminejad and Jahan-Parvar 2021 ) and consequently the funds' performance. The results in Table 14 confirm our earlier finding, and after excluding the funds from Iran and China, the significance of HCE remains.…”

Lifting of International Sanctions and the Shadow Economy in Iran—A View from Outer Space

“…Several other studies focus on the effects of oil price shocks and sanctions on different aspects of Iran's economy, such as GDP growth, inflation, publicly traded companies, environment, export, technology, foreign investments, and oil production [19][20][21][22]. Farzanegan and Markwardt analyze the dynamic relationship between oil price shocks and major macroeconomic variables using a VAR approach [59].…”

“…In addition, this contribution will help to understand the dynamics of the shadow economy in similar economies. Finally, it is an important addition to several recent studies about international sanctions against Iran and already existing studies about its shadow economy [3,[9][10][11][12][13][14][15][16][17][18][19][20][21][22][23]. The paper is structured as follows.…”

Identification and Prioritization of Critical Risk Factors of Commercial and Recreational Complex Building Projects: A Delphi Study Using the TOPSIS Method

“…In fact, political issues related to nuclear energy and subsequent sanctions against Iran have led to an increase in Iran's economic risk index in recent years [11]. The growth of the economic risk index has undoubtedly reduced Iran's economic interactions with other parts of the world, which can increase the likelihood of occurrence and severity of the impact of various other internal and external risks of projects [59]. At the same time, building construction is one of the main problems in developing countries today and because of rapid population growth, lack of financial resources, land problems, lack of skilled manpower, and, most importantly, lack of proper policy and planning, this issue has become critical [60].…”

“…Poor technical specifications R 47 Mismatch of layout with site location R 48 Inaccuracies in realistic calculations and estimates R 49 Non-compliance with design codes R 50 Lack of maintenance period in designing process R 51 Lack of a specific contract with contractors R 52 Contractor's claim R 53 Lack of coordination between the design process and manufacturing technology Delays in construction R 57 Poor quality of workshop supervision R 58 Incomplete description of tasks in contracts R 59 Failure to complete work items in anticipated times…”