IDEAS home Printed from https://ideas.repec.org/a/taf/ginixx/v46y2020i4p526-550.html
   My bibliography  Save this article

The effects of economic sanctions on targeted countries’ stock markets

Author

Listed:
  • Glen Biglaiser
  • David Lektzian

Abstract

Although much previous research has investigated the impact of sanctions on trade and global capital, few academic studies have explored the effect of sanctions on stock markets in targeted countries. The lack of research is surprising as a frequent goal of sanctions is to inflict pain on financial markets in targeted countries to promote policy change. Using monthly market data for 66 countries from 1990 to 2005, we find that the introduction of import sanctions by countries with developed economies, such as those with membership in the G20, has a significantly negative impact on stock market valuation in targeted countries. However, this effect only occurs when targeted states are not already subject to multiple sanctions. Our study suggests that sanctions can have a negative effect on stock market value in targeted countries, but that their effectiveness is relatively limited in practice due to the overuse of sanctions. This finding is supported by the marginal decrease in the negative effect on the target’s stock market as the number of sanctions increases.

Suggested Citation

  • Glen Biglaiser & David Lektzian, 2020. "The effects of economic sanctions on targeted countries’ stock markets," International Interactions, Taylor & Francis Journals, vol. 46(4), pages 526-550, July.
    • Handle: RePEc:taf:ginixx:v:46:y:2020:i:4:p:526-550
    DOI: 10.1080/03050629.2020.1765774
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03050629.2020.1765774
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/03050629.2020.1765774?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:ginixx:v:46:y:2020:i:4:p:526-550. 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/GINI20 .

    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.