Investigating the impact of US sanctions on different industries in the Tehran Stock Market

Alizadeh, Azim; Mohammadzadeh, Ehsan

Investigating the impact of US sanctions on different industries in the Tehran Stock Market

Document Type : Original Article

Authors

Azim Alizadeh ¹
Ehsan Mohammadzadeh ²

¹ Assistant Professor, Department of Management, Police Science and Social Studies Research Institute, Tehran, Iran.

² Ph.D. Candidate, Department of Economics, faculty of administration and economics, Isfahan University, Isfahan, Iran.

Abstract

One of the most important threats to the economic security is the economic impulses caused by the cruel US sanctions on the capital market. Investment security in the capital market, which affects at least 60% of Iran's society, is very important not only for investors but also for policymakers in the field of economic security. This research examines the effects of US sanctions on companies listed on the Tehran Stock Exchange. This study analyzes the asymmetric effects of sanctions on different industries by examining the short-term returns of these companies after the imposition of sanctions.
To analyze the abnormal returns of stocks at the time of sanctions, the event research method has been used and the required information has been taken from the financial information processing website of Boursview for the years 2005 to 2021 for companies listed in the Iranian Stock Markets.
The research shows that the market value of the companies has been affected by the sanctions and the impact of sanctions has been different among different industries. Specifically, the energy industry has been unexpectedly vulnerable to sanctions, which has led to a decrease in the short term returns of stocks in this industry. On the other hand, the financial industry has experienced abnormally positive returns both in response to total sanctions and financial sanctions.

Keywords