Monthly Archives

November 2019

Size-Dependent Industrial Policies and Firm Performance: The Case of Iran’s Credit Extension Policy for Small Firms, 2005-2013


It has been well documented that small firms often face serious credit constraints that limit their investment and production options (Beck and Demirguc-Kunt, 2006; Banerjee and Duflo, 2014). Policymakers in many countries have taken this stylized fact as implying that extending credit to small firms on easier terms could be an effective means of expanding employment and output. However, such an assessment is not necessarily warranted because the effects of easy credit on small firms depends on the ways and the circumstances under which such policies are implemented.

In this paper, we examine the direct effects of the Plan to Expand Quick-Returns Small Firms (PEQRSF), a size-dependent credit extension policy on small manufacturing firms (with 10-49 workers) in Iran. MORE…

The Impact of Intensified International Sanctions on Iran’s Manufacturing Sector, 2012-2013


International sanctions are meant to curb economic activity and induce policy or political change in a target country. However, the effects of sanctions on different parts of the economy are complex and could induce expansion in some parts as they cause contraction in other parts. The channels through which sanctions work could be microeconomic (e.g., trade and supply chain disruption) or macroeconomic (e.g., exchange rate depreciation and finance limitations). Firms and their stakeholders could be negatively affected if their access to imports or export markets become constrained or their domestic output markets shrink. But there may be some benefits for firms that face less competition in their input or output markets or have built up large inventories of goods that become scarce under sanctions. In this paper, we make an attempt to identify some of these channels in the case of Iran’s manufacturing sector during 2012-2013 when Iran faced intensified international sanctions. Our source of data is an annual panel of the Survey of Manufacturing Plants (SMP) carried out by the Statistical Center of Iran since 2003… MORE…

Choosing Economics for Higher Education

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