Firms persistence under sanctions: Micro‐level evidence from Iran

Given the importance of firm strategic management in the time of crisis, this study investigates Micro, Small and Medium Enterprises (MSMEs) approaches to persistence during the international sanctions against Iran. Using data from a questionnaire of 486 firms between December 2019 and September 202...

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Bibliographic Details
Published in:World economy 2023-08, Vol.46 (8), p.2408-2431
Main Authors: Cheratian, Iman, Goltabar, Saleh, Farzanegan, Mohammad Reza
Format: Article
Language:English
Subjects:
Business planning
Companies
crisis
Economic analysis
Finance
Financial planning
firm
Information technology
Iran
management
Marketing
Networking
ordered probit
Overhead costs
persistence
R&D
recession
Research & development
sanction
Sanctions
Small & medium sized enterprises-SME
Small business
Strategic management
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Summary:Given the importance of firm strategic management in the time of crisis, this study investigates Micro, Small and Medium Enterprises (MSMEs) approaches to persistence during the international sanctions against Iran. Using data from a questionnaire of 486 firms between December 2019 and September 2020, we found that reducing research and development (R&D) expenditures, marketing costs and fixed/overhead costs and investing in information technology (IT) are positively related to firm persistence. Conversely, managerial decisions to reduce production and cut or freeze staff pay have negative and significant impacts on a firm's ability to persist during sanctions. Moreover, micro‐firms are more resilient than their small and medium counterparts. The findings also confirm that age has a significant and positive impact on firm persistence. Finally, the results show that having a business plan, access to finance and technology, owner education, export orientation, business networking and consulting services are the key drivers of withstanding pressure from sanctions.
ISSN:1467-9701
0378-5920
1467-9701
DOI:10.1111/twec.13378