The Effects of Economic Sanctions on Targeted Countries’ Stock Markets

In this article, we conduct an empirical study to investigate the impact that economic sanctions imposed on each country have had on the rate of GDP growth in the countries that have been targeted and stock price volatility. Our sample encompasses the years 2002 to 2018 and includes 100 different nations. The data was also compiled from yearly country information released on websites to assess the effects of autonomous factors on regression variables and Eviews software was used to analyze the data. First, our research shows that economic growth is affected in a way that is statistically and economically significant by sanctions imposed on each country. The application of sanctions results in a drop in percentage points in the real per capita GDP growth rate of the state that is the target of the sanctions and also declines in stock price vitality are observed. These negative impacts continue to manifest themselves for a decade. GDP growth and stock price volatility are impacted more when the countries impose comprehensive economic sanctions, which are defined as embargoes that target practically all economic activity