Effects of International Sanctions on Exports in Iran with an Approach to Business Attraction

 

Volume 3, Issue 2, Number 6, Pages 107-120, Published Online April 20, 2015

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Author(s):

Sanaz Kahrazeh and Naser Nikpour

ABSTRACT:

Today, international sanctions are used as a means to achieve political objectives. Iran has been repeatedly put under sanction and it has had various consequences. This paper estimates the impact of economic sanctions on Iran’s exports to member countries of the ECO, OPEC and ASEAN Union during the period 1992-2013 using the gravity model approach and the OLS estimation method based on panel data. Estimation results show that sanctions have a negative impact on the volume of Iran’s exports to member countries of the OPEC but it has no impact on exports to the ECO and ASEAN. Finally, it is recommended that Iran shifts its diplomacy from West to East and choose its Eastern neighbors for doing business transactions in order to neutralize the effects of sanctions.

KEYWORDS:

economic sanctions, international trade, gravity model, panel data, OLS

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