Working Papers

Understanding multi-layered sanctions: A firm-level analysis

This paper examines which types of firms are hit by multi-layered sanctions, quantifies the extent of the economic impact on the affected firms, and identifies the channels through which these effects are propagated. To this end, I use a text-based approach from computational linguistics to gauge the exposure of publicly listed Iranian firms to sanctions, validating this measure through its anticipated fluctuation over time and across industries. The findings reveal three key insights. First, Iranian firms report significant challenges due to sanctions, exceeding COVID-19 concerns by up to 20%. Second, politically-connected and non-connected firms suffer equally from sanctions; for every $1 loss inflicted on connected firms, an externality of $5 is imposed on non-connected firms, considering their economic scale. This contradicts the idea that sanctions only inflict harm on political decision-makers. Third, sanctions are hurtful; firms with higher exposure to sanctions endure greater losses in stock market value in the wake of unanticipated sanction events. Sanctions also lead to reduced sales, investment and hiring. Furthermore, the study reveals that sanctions impact firms via several mechanisms, the primary one being the limitation of access to export destinations.

Media Coverage: VoxEU Column

Immigration Backlash: The Political Consequences of Open Borders. (draft available upon request)

Work in Progress

• Estimating the effect of online food delivery apps on consumers and businesses

• Labour Market Dynamics and Political Change in the Europe. (with Tim Besley and Torsten Persson)

• Can Environmental Activism Raise Public Awareness? Evidence from more than Thousand Protests. (with Azhar Hussain and Ranjana Sinha)