IDEAS home Printed from https://ideas.repec.org/a/taf/recsxx/v25y2022i1p1219-1238.html
   My bibliography  Save this article

Financial constraint and output pricing: the case of international sanctions against Iran

Author

Listed:
  • Sajad Ebrahimi

Abstract

This paper examines whether financial constraints of firms influence their pricing behavior. To do so, a product-level dataset is used from Iranian-listed manufacturing companies. This study employs the imposition of international sanctions against Iran in 2012 as an exogenous shock to identify the effect of financial constraints. According to the results financially restricted firms keep their prices lower than their counterparts to increase their internal financial resources. The results show the difference between output prices of constrained and unconstrained firms rising after the imposition of sanctions. In addition, this relationship is affected by the degree of export-orientation of firms, and only exporter firms that experienced the negative demand shock after the sanctions, set their price lower to reduce the financial pressures. Also, the degree of dependency on imported input does not play a significant role in the relationship and ownership structure of firms has a significant impact on the relationship.

Suggested Citation

  • Sajad Ebrahimi, 2022. "Financial constraint and output pricing: the case of international sanctions against Iran," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 1219-1238, December.
    • Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1219-1238
    DOI: 10.1080/15140326.2022.2129145
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/15140326.2022.2129145
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/15140326.2022.2129145?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1219-1238. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/recs .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.