Externalities of economic sanctions on performance of intra-industry non-sanctioned firms: Evidence from Zimbabwe

Title

Externalities of economic sanctions on performance of intra-industry non-sanctioned firms: Evidence from Zimbabwe

Creator

Sun Jie

Makosa Lewis

Yang Jinkun

Yin Fangyuan

Jachi Moses

Bonga Wellington Garikai

Abstract

Abstract
This paper investigates the effect of targeted economic sanctions by the United States and the European Union on the performance of intra-industry non-sanctioned firms. Using data of non-sanctioned firms listed on the Zimbabwe stock exchange during the period 2009–2018, our regression results show that non-sanctioned firms in the same industry as sanctioned firms perform better than ordinary non-sanctioned firms, signalling the positive competitive effect. A mediating test suggests that sanctions increase the market share of non-sanctioned firms in the same industry as sanctioned firms and subsequently increase their performance.
Abstract
Keywords
Competitive effect, Contagion effect, Economic sanctions, Firm performance

Date

November 2021

Source

Scottish Journal of Political Economy

identifier

doi.org/10.1111/sjpe.12290

volume

68

issue

5

pages

643-664