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Book part
Publication date: 30 December 2013

Liu Jianwei

China has showed its eagerness in using its economic strength in the very recent years. Is China going to be a major sanctioning state like the United States or the…

Abstract

China has showed its eagerness in using its economic strength in the very recent years. Is China going to be a major sanctioning state like the United States or the European Union? This chapter argues that although there have been an increasing number of economic sanctions imposed by China with its expanding national interests and growing diplomatic problems, China will still keep a low profile in using economic sanctions because of the restraining factors such as the WTO rules, inherent problems in its economy, the pursuit of a good reputation and its strategy of peaceful development. Thus the frequency and tactics of using economic sanctions may vary according to its rising economy and changing international situation, but that will go in a very limited way.

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Cooperation for a Peaceful and Sustainable World Part 2
Type: Book
ISBN: 978-1-78190-655-2

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Book part
Publication date: 24 November 2017

Anna Abramova and Olga Garanina

Economic sanctions imposed by the EU and United States on Russia have brought significant changes into Russian foreign economic policy, in particular leading to deepening…

Abstract

Purpose

Economic sanctions imposed by the EU and United States on Russia have brought significant changes into Russian foreign economic policy, in particular leading to deepening cooperation with Asian countries and China in particular. The present contribution aims to shed light on the influence of sanctions on Russian multinational enterprises (MNEs) internationalization toward China using the example of energy and information and communication technology (ICT) industries.

Methodology/approach

The chapter builds on case study analysis. The choice of sectors allows us to highlight the recent strategic trends in the internationalization of oil and gas industry, dominated by state-owned multinationals, and in ICT by privately owned companies.

Findings

Our results provide empirical data for understanding the influence of sanctions on MNEs from the country being under the sanctions. In the case of Russian oil and gas industry and ICTs, research indicates that the shift toward China was not initiated primarily by the sanctions. In both cases, expansion to Asian markets was correlated with business interests in the Chinese market. However, changes in geopolitical and macroeconomic business environment accelerated Russian MNE’s pivot to China, for the purposes of attracting capital and reaching new markets in context of deteriorating relations with western partners. The cases demonstrate a moderating role of the industry in the context of sanctions, helping compensate for the slowdown of economic relations with traditional partners.

Originality/value

The novelty of the chapter is to delineate the consequences of sanctions on MNEs from the country being under sanctions. In this way, it illustrates the role of geopolitical environment in intensifying internationalization of Russian MNEs toward China.

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The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

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Article
Publication date: 21 May 2020

Mohammad Saeed Taslimi, Aryan Azimi and Mohsen Nazari

The purpose of this study is to investigate factors contributing to the development of resilience capacity and capability of industrial clusters in order for them to…

Abstract

Purpose

The purpose of this study is to investigate factors contributing to the development of resilience capacity and capability of industrial clusters in order for them to mitigate, absorb and adapt to the impacts of Iran’s economic sanctions.

Design/methodology/approach

The Hospital Equipment Cluster of Tehran (HECT) was selected as the case study for the research. The data were collected using the library and field research and analyzed using the thematic analysis method.

Findings

The key dimensions of resilience were grouped into socio-cultural, economic, technical-organizational and institutional–infrastructural categories. Based on the “complex adaptive system” theory, each of the abovementioned dimensions were investigated on different levels of analysis, including individual, enterprise, cluster, government and environment. Eventually, recommendations were made by considering required capacities and capabilities of resilience of the hospital equipment sector toward economic sanctions.

Originality/value

The resilience toward economic sanctions, as an extensive disaster, is a considerably new subject and few studies have been performed in the field. This research provides practical solutions for local policy-makers, authorities and enterprise managers.

Details

International Journal of Disaster Resilience in the Built Environment, vol. 12 no. 1
Type: Research Article
ISSN: 1759-5908

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Book part
Publication date: 21 October 2019

Beata Stępień and Patrick Weber

The probability of sanctions’ effectiveness increases not only due to their severity for the target country’s economy but is also a function of adherence to their…

Abstract

The probability of sanctions’ effectiveness increases not only due to their severity for the target country’s economy but is also a function of adherence to their principles by enterprises from senders’ countries. Sanctions avoidance and increasing investments in the target country (the observed behavior of many companies facing the European Union (EU) sanctions against Russia which were imposed in 2014) mitigate the impact of these restrictive measures. In this chapter we show (by analyzing adaptation strategies of EU enterprises affected by sanctions imposed on Russia by EU) how particular types of strategies affect the effectiveness of sanctions and what factors determine the choice of their respective behavior. We draw our conclusions from the online survey of more than 1,000 responses from British, French, German, Italian, and Polish enterprises. We find that while administrative burdens make conformance to sanctions more likely, market dependency and non-tangible assets in the target country induce strategies that challenge sanction policies. We conclude that the EU–Russian sanctions dispute incentivizes European companies to increase their engagement in Russia. These so-called defiance strategies diminish the real economic effect of the sanctions and generate a new equilibrium which outlasts the lifting of these restrictive measures and has negative long-term political implications.

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International Business in a VUCA World: The Changing Role of States and Firms
Type: Book
ISBN: 978-1-83867-256-0

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Article
Publication date: 8 May 2017

Mahdi Salehi, Mostafa Karimzadeh and Navid Paydarmanesh

US sanctions have been a major feature of US Iran policy since Iran’s 1979 Islamic revolution, but the imposition of UN and worldwide bilateral sanctions on Iran that…

Abstract

Purpose

US sanctions have been a major feature of US Iran policy since Iran’s 1979 Islamic revolution, but the imposition of UN and worldwide bilateral sanctions on Iran that began in 2006 and increased dramatically as of 2010 is recent by comparison. The objectives of US sanctions have evolved over time. Broad international sanctions imposed on Iran harmed Iran’s economy and contributed to Iran’s acceptance of agreements that exchange constraints on its nuclear program for sanctions relief. The subject of this study is important because both Iran and the international communities are demanding for information about the effect of sanctions on Iran. In an international and regional perspective, it seems that sanctions have a negative impact on economic, social and even political status of Iran. Therefore, this paper aims to examine the impact of Iran Central Bank sanction on Tehran Stock Exchange as on December 31, 2011.

Design/methodology/approach

Variables of model are consisted by exchange rate, oil prices and Tehran Stock Exchange Price Index (TEPIX) from October 2, 2011 to March 29, 2012, which is offered daily. To analyze the model, the authors used Johansen–Juselius and Autoregressive Distributed Lag (ARDL) methods.

Findings

The results indicate that there is a long-run equilibrium relationship between selected variables as oil prices, and exchange rates have a positive effect on the TEPIX. In other words, the results of the econometric estimation show the positive effect of the Iran Central Bank sanction on the TEPIX. Thus, because of economic sanctions imposed by the Western countries, Tehran Stock Exchange has been growing.

Originality/value

No empirical research exists that examines the impact of sanctions on stock price in developing countries. This study fills this gap by examining the links between sanctions and stock price in Iran.

Details

International Journal of Law and Management, vol. 59 no. 3
Type: Research Article
ISSN: 1754-243X

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Book part
Publication date: 6 November 2018

Boris Ananyev, Bruno S. Sergi and Yan Vaslavskiy

This chapter considers anti-Russia sanctions and their role in the country’s sustainable development. The authors consider sanctions against Russia in the general context…

Abstract

This chapter considers anti-Russia sanctions and their role in the country’s sustainable development. The authors consider sanctions against Russia in the general context of restrictive measures as an instrument of international economic activity. The nature of the anti-Russia sanctions is analyzed in the chapter. A chronology of the introduction of restrictive measures against Russia is discussed. The authors consistently examine the negative consequences and positive aspects of the anti-Russia sanctions in the general political and economic context. Due to duplicitous implications of the sanctions, attention is paid to the import phaseout policy, which has been proclaimed and implemented by Russia. In addition, reciprocal restrictive measures (counter-sanctions), which are introduced by Russia in response to the actions against the country, have been considered in the chapter. Regarding the Russian economy as an inherent part of the world economy, the authors present their conclusions on how reciprocal restrictive measures cause damage to the interests of all parties involved in the process.

Details

Exploring the Future of Russia’s Economy and Markets
Type: Book
ISBN: 978-1-78769-397-5

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Article
Publication date: 30 July 2020

Seyyed Reza Nakhli, Monireh Rafat, Rasul Bakhshi Dastjerdi and Meysam Rafei

The purpose of the current paper is to analyze the simultaneous effects of oil sanctions and financial sanctions on Iran's macroeconomic variables in a small open economy…

Abstract

Purpose

The purpose of the current paper is to analyze the simultaneous effects of oil sanctions and financial sanctions on Iran's macroeconomic variables in a small open economy in the dynamic stochastic general equilibrium (DSGE) framework.

Design/methodology/approach

A DSGE model with the new Keynesian approach has been designed for the above mentioned purpose giving consideration to households, production, trade, oil, government and central bank sectors. All of the parameters were calibrated by using geometric means of macroeconomic variables in 2004–2017 as the steady-state values of the variables in the static model.

Findings

Amplifying the intensity of the oil sanctions reduces oil production due to decreasing investment, technology and export of oil and reduces the central bank's foreign reserves ratio to the money base that leads to an increasing exchange rate. Furthermore, oil sanctions decrease the government revenues due to a decrease in oil export and by the government imposing an expansionary fiscal policy in the form of increasing current expenditure and preserving construction expenditure to prevent deepening the recession, which causes budget deficit and then the issue of more bonds with a higher nominal interest rate. On the other hand, financial sanctions raise transaction costs and marginal costs in the trade sectors that lead to inflation and a decrease in nonoil export and various kinds of imports. Due to inflation and uncertainty, consumption of a household increases and investment expenditure of a household decreases.

Originality/value

To the best of the author's knowledge, few studies in the world have analyzed the economic effect of the sanctions in the framework of DSGE models. There is no study in Iran to date which investigates the effects of the sanctions in the form of a DSGE model. So, this paper is the first study in Iran and one of the few studies in the world using a DSGE model for analyzing the effects of sanctions. Imposing three kinds of oil sanctions in addition to a financial sanction is another innovation of the current paper.

Details

Journal of Economic Studies, vol. 48 no. 4
Type: Research Article
ISSN: 0144-3585

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Book part
Publication date: 15 July 2009

Sumita Kumar

Sanctions are normally used as an instrument by one country or an alliance of countries to affect change in the behaviour of another country. As Ian Anthony has noted…

Abstract

Sanctions are normally used as an instrument by one country or an alliance of countries to affect change in the behaviour of another country. As Ian Anthony has noted, “Within the legal code of states, sanctions are that part of a law that inflicts a penalty for its violation. In common usage, international sanctions can be defined as any restriction or condition established for reasons of foreign policy or national security applied to a foreign country or entity by a group of states using substantially equivalent measures” (Anthony, 2002, p. 204). Most analysts would agree that clearly defined goals on the part of the initiator – and outlining a consistent set of policies with respect to such goals – are an important factor in gauging the effectiveness of sanctions at any given time.

Details

Putting Teeth in the Tiger: Improving the Effectiveness of Arms Embargoes
Type: Book
ISBN: 978-1-84855-202-9

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Expert briefing
Publication date: 18 January 2016

Agreement between Iran and the P5+1 (France, Germany, the United Kingdom, Russia, China and the United States) on the former's nuclear programme in July 2015 has been…

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Article
Publication date: 11 September 2017

Mohammad Nasre Esfahani and Ehsan Rasoulinezhad

The purpose of this paper is to find out whether under sanctions, Iran’s trade direction has shifted from Europe (trade policy of de-Europeanization) toward Asia (trade…

Abstract

Purpose

The purpose of this paper is to find out whether under sanctions, Iran’s trade direction has shifted from Europe (trade policy of de-Europeanization) toward Asia (trade policy of Asianization).

Design/methodology/approach

The paper conducts three panel data estimations (FE, RE, and FMOLS) based on the gravity model approach for bilateral trade patterns between Iran-25 EU members and Iran-25 Asian countries over the period 2006-2013.

Findings

The empirical evidence indicates a significant negative effect of sanctions on Iran-EU bilateral trade, while it has a positive impact on trade between Iran and the Asian countries. These findings empirically confirmed that the imposition of various sanctions related to the Iran’s nuclear program has pushed the foreign trade policy of this country toward Asianization and away from Europeanization.

Originality/value

To the best of the authors’ knowledge, this paper is the first attempt to examine the Iran’s trade policy changing under the imposition of sanctions related to its nuclear program.

Details

Journal of Economic Studies, vol. 44 no. 4
Type: Research Article
ISSN: 0144-3585

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