Measuring The Impact of Sanction On Targeted Firm's Market Value: Evidence From Tehran Exchange Market after European:: :::union::::: Sanctions

On 23 January 2012, the Europian :::::union::::: imposed a set of sanctions on Iran’s oil and petrochemical industries. The goal was to isolate them from international markets and also to reduce the government’s income. This study assesses the impact of passing the bill in EU parliament on the market value of petrochemical firms in the short and long runs. We incorporate the method of event studies to compare the price return and the cash flow of the targeted firms (petrochemicals) compared to the control firms (the whole market). The panel data method is also applied in order to measure the average effects. In the short run, we do not observe any significant decline in the targeted firms’ price return. However, in the long run, the cash returns of the targeted firms’ stock price has significantly increased.