Examining the effect of international sanctions on Iran's imports of consumer, capital, and intermediate goods from China using the Smooth Transition Regression (STR) approach

Etehadi, Sahar; Lotfalipour, Mohammad Reza; Khodaparast Mashhadi, Mahdi; Esmaeilpour Moghadam, Hadi; Homayounifar, Masoud

doi:10.30465/jnet.2025.50976.2176

Examining the effect of international sanctions on Iran's imports of consumer, capital, and intermediate goods from China using the Smooth Transition Regression (STR) approach

Document Type : Research Paper

Authors

sahar etehadi ¹

Mohammad Reza Lotfalipour ²

Mahdi Khodaparast Mashhadi ³

Hadi Esmaeilpour Moghadam ⁴

Masoud Homayounifar ³

¹ PhD student in economics, Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

² Professor Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

³ Associate professor Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

⁴ Assistant Professor, Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

10.30465/jnet.2025.50976.2176

Abstract

Economic sanctions have been used as one of the strongest tools of pressure on countries in recent years, and their effects can put severe pressure on countries' economies. Iran has also faced many restrictions in international trade due to these sanctions. In such conditions, circumventing sanctions and finding alternative routes to maintain minimal trade is essential. This study examines the effects of sanctions on Iran's imports from China using the Smooth Transition Regression (STR) model for three different product groups. The independent variables of the research include the sanctions index, China's GDP, and the exchange rate, for which data has been collected and analyzed on a monthly basis for the period 2011 to 2022. The results show that sanctions have had different effects on the import of consumer, intermediate, and capital goods in each of the two regimes. In the first regime, sanctions reduced imports of consumer, capital, and intermediate goods from China, but in the second regime, sanctions increased imports of these three product groups from China. The exchange rate and China's GDP have a positive and significant effect on the import of intermediate goods under severe sanctions, while this effect is not significant for consumer and capital goods.

Keywords

international sanctions

imports

commodity groups

non-linear relationship

smooth transition regression