Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265302 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Money and Economy [ISSN:] 2588-7114 [Volume:] 17 [Issue:] 1 [Publisher:] Monetary and Banking Research Institute [Place:] Tehran [Year:] 2022 [Pages:] 67-88
Publisher: 
Monetary and Banking Research Institute, Tehran
Abstract: 
The paper aims to examine the impact of financial sanctions on capital inflow and outflow in Iran. The research question is about examining the effect of financial sanctions on FDI inflow and capital outflow in Iran. We used the intervention model as an econometric method to estimate the impact during 2005-2019. The paper discussed three periods. From 2005 to 2010, severe financial sanctions negatively affected FDI, and capital outflow was positive. From 2011 to 2015, severe and multilateral financial sanctions were implemented, adversely affecting FDI. There is a positive relationship between financial sanctions and capital outflow. In the third period, i.e., 2016-2019, when financial sanctions and implementation of JCPOA and the withdrawal of the United States happened, the overall effect on FDI inflow is negative. Although Iran absorbed about $2 billion of FDI, with the withdrawal of the United States from JCPOA and the return of secondary U.S. sanctions, the reduction of FDI happened again. On capital outflow, the sanction has a positive effect on capital outflow. Altogether, during 2005-2019, financial sanctions adversely affected FDI inflow and increased capital outflow in Iran.
Subjects: 
Financial sanction
Capital inflow
Capital outflow
Unilateral and multilateral sanction
Intervention model
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article
Document Version: 
Published Version
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