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Financial Sanctions and Iranian Banks' Performance

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  • Faraji Dizaji , Sajjad

    (Department of Economics, Tarbiat Modarres University)

Abstract

In this study, we use Stochastic Frontier analysis approach to estimate cost efficiency, economies of scale, and technological progress among Iranian banks from 1999 to 2012. The results show that there is a marked difference in cost efficiency before and after the recent financial sanctions against Iranian banking industry. Moreover, the results indicate that specialized government-owned banks are less efficient than commercial government owned banks and non-government owned banks after the imposed financial sanctions. Furthermore, we could not find a logical relationship between cost efficiency and Iranian banks' size. Cost reductions attributed to technological progress and economies of scale were greater prior to recent financial sanctions.

Suggested Citation

  • Faraji Dizaji , Sajjad, 2013. "Financial Sanctions and Iranian Banks' Performance," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 8(4), pages 99-136, October.
    • Handle: RePEc:mbr:jmonec:v:8:y:2013:i:4:p:99-136
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    Cited by:

    1. Faraji Dizaji, Sajjad & Jariani, Farzaneh & Najarzadeh, Reza, 2018. "Impact of sanctions on bilateral trade of agricultural products between Iran and MENA region and the EU countries," MPRA Paper 89438, University Library of Munich, Germany.
    2. Sajjad. F. Dizaji & Mohammad Reza Farzanegan, 2018. "Do sanctions reduce the military spending in Iran?," MAGKS Papers on Economics 201831, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    Cost efficiency; Technological progress; Banking; Sanctions; Iran;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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