1- Semnan University , m.gholampour@semnan.ac.ir
2- Semnan University
3- Allameh Tabataba’i University
2- Semnan University
3- Allameh Tabataba’i University
Abstract: (487 Views)
Investment acts as a critical engine for economic growth; however, the Iranian economy has witnessed a downward trend in investment levels in recent years. Economic sanctions, employed as instruments of political and economic pressure, exert extensive impacts on the national economy, the business environment, and investment flows. This study investigates the asymmetric effects of economic sanctions on investment in Iran. To achieve this, it utilizes a novel index developed by Laudati and Pesaran (2023). Constructed through systematic content analysis of reputable international newspapers, this index provides a quantitative reflection of the intensity of Iran's economic sanctions over the past few decades and aligns significantly with historical milestones of sanction intensification. Employing quarterly data (2009–2023) and the Non-linear Autoregressive Distributed Lag (NARDL) approach, the findings reveal that investment exhibits asymmetric sensitivity: it reacts sharply to the imposition of sanctions (with a significant negative effect) while showing relative insensitivity to their alleviation (with an insignificant coefficient). Furthermore, economic growth exerts a positive impact on investment, whereas the interest rate also demonstrates asymmetric effects. The distinctive advantage of this research lies in its application of the NARDL methodology to identify asymmetric impacts and its use of a novel economic sanctions index, facilitating a more realistic analysis of investment behavior under sanction conditions.
Keywords: Economic Sanctions, Investment, Asymmetric Effects, Nonlinear Auto-Regressive Distributed Lags (NARDL)
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