The Impact of Economic Sanctions on Import of Iran Capital, Intermediate and Consumer Goods (1981-2013)

Foreign trade sector works as main lever of economic growth and development, Therefore it has been drawing much attention in developing countries.The impact of economic sanctions on Iran’s foreign trade Structure is important especially in the composition of imports because it is an essential ingredient of economic growth and development. The main purpose of this study is to assess the impact of economic sanctions on imports composition of Iran (1981-2013). For this purpose, sanctions have been divided in to limited, moderate and extensive sanctions based on the scales provided by Hufbauer that two dummy variables presented in the model, Then, the impact of these dummy variables along with other variables in the import demand function of capital, Intermediate and consumer goods have been estimated by FMOLS. The results showed that both of extensive and limited economic sanctions have reduced import of intermediate goods. On the other hand, capital and consumer goods import have increased during the period of extensive economic sanctions. However, limited economic sanctions have no significant effect on consumer imports.