The Effect of Economic Sanctions on Iran's Export

Homayoun Shirazi (), Karim Azarbaiejani () and Morteza Sameti ()
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Karim Azarbaiejani: Department of Economics, University of Isfahan, Iran.
Morteza Sameti: Department of Economics, University of Isfahan, Iran.

Iranian Economic Review (IER), 2016, vol. 20, issue 1, 111-124

Abstract: Since the Islamic Revolution of 1987, Iran has been affected by economic sanctions imposed by Western countries, especially the U.S. Since 2006 and with the development of the Iranian nuclear conflict, the United Nations has frequently imposed economic and financial sanctions against Iran. As a result of these international restrictions and their administration by an international organization, iran's exports has been heavily influenced. This study seeks to address the question whether the economic sanctions imposed against Iran’s exports have been effective. And if yes, and if yes, to what extent this effectiveness, is. Due to the fact that the sanctions imposed on Iran have been at first less economic and they have intensified over time, the effect of the sanctions in the three years of 2012, 2013, and 2014 have been examined by the fixed-effects Gravity model extracted from the model of Anderson and van Wincoop. In addition, all the trade relations and models considered have been estimated through the PPML method to estimate the unbiased coefficients in order to use all the data and to avoid the problem of zeros. Based on our results, the sanctions imposed against Iran have had a significant and negative effect on the amount of export in Iran to all its trading partners considered in all the given years. The examination of the coefficients during the years 2012, 2013, and 2014 show that Iran's value of export has fallen annually by 33 percent in average and the total loss for these three years has been 104 billion dollars.

Keywords: Iran’s Nuclear Conflict; Gravity Equation; PPML; Sanctions. (search for similar items in EconPapers)
Date: 2016
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