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

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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…[/text-with-icon][/vc_column][/vc_row]