On Target? The Incidence of Sanctions Across Listed Firms in Iran

Our paper exploits this insight about the returns to the lifting of sanctions in order to test for the effectiveness of the targeting of domestic political elites in the Iranian case. [...] The key distinction be- tween our studies is that Ahn and Ludema evaluate the efficacy of a set of specific sanctions instruments aimed at particular entities, while we assess the success of targeting in terms of the impact of the sanctions regime as a whole on the assets of influential political actors.5 Moreover, unlike the rest of the sanctions literature, our estimates are not based on the tim. [...] To understand the potential attractiveness of targeting to S, assume that the cost of sanctions to S rises in y, so that increasing the cost of sanctions in the receiving country also increases the cost to the sender.8 Then consider the scenario in which S has complete control over their incidence across o and p. [...] Then we can back out λt from the closing price of the contract, since 19 the evolution of the contract’s daily price and the implied daily arrival probability of an airstrike from the beginning of the sample period (April 14, 2012) through the end of 2012.30 Second, we use the Datastream database to extract stock price data for a set of firms for which profit expectations were likely to be sensiti. [...] The estimated average effect of each day of the Geneva event on non-target firms is approximately 32% of the size of the standard deviation of returns across all firm-days in the sample.