Economic sanctions have become one of the most decisive external constraints on Iran's economy in the recent decade. However, the intensity and channels through which they affect total factor productivity have not been precisely identified. Adopting a historical-analytical approach, this study examines how sanctions impact Iran's economic productivity and identifies the mediating role of economic sectors. The research utilizes annual time-series data from 2011 to 2022, covering three consecutive phases: intensification of sanctions, partial relief, and severe reimposition. Sanction intensity is measured using a composite index, and its relationship with total productivity and sectoral productivity (oil, industry, agriculture) is analyzed through correlation analysis, univariate and multivariate regression, and trend analysis. The historical approach enables identification of dynamic patterns of economic adaptation across three distinct periods. Findings reveal that sanctions directly explain only 0.3% of total productivity variance. However, 91% of their effect is transmitted indirectly through sectors, with the industrial sector alone accounting for over 90% of total economic productivity variance. During the reimposition period, this sector transitioned from negative to positive averages despite intensified external pressure. The oil sector is the most vulnerable, while agriculture is the most resilient. Trend analysis warns that total economic productivity peaked in 2024 and, without structural transformation, will move toward negative values from 2031 onward. The results emphasize the necessity of focusing policy on enhancing industrial productivity, industrializing agriculture, and transitioning from reactive resilience to structural development.
Ali, A., Aleemran, R., & Eskandari Sabzi, S. (2024). The role of military industries in Iran’s economic growth using a Markov switching model. Defense Economics and Sustainable Development, 9(31), 35–56. https://dor.isc.ac/dor/20.1001.1.25382454.1403.9.31.2.6[In Persian]
Aminizadeh, M., Rafiee, H., Rostamzadeh, Z., Riahi, A., & Mehrparvar Hosseini, E. (2023). Investigating the role of economic sanctions on bilateral trade balance of Iran’s agricultural sector. Agricultural Economics and Development, 30(4), 1–20. https://doi.org/10.30490/aead.2023.297992.1078 [In Persian]
Ashraf Ganjoui, R., & Iranmanesh, S. (2023). The impact of UN and US economic sanctions on the misery index of targeted countries. Iranian Journal of Economic Research, 28(94), 281–323. https://doi.org/10.22054/ijer.2022.67022.1088 [In Persian]
Bashiri, S., & Heydari, H. (2024). A comprehensive analysis of Iran’s industrial sector structure with emphasis on developments over the past two decades (e20027). Reports, 32(6), e20027. https://doi.org/10.22034/report.2024.17150.1918 [In Persian]
Behboud, R., Zarei, A., Azar, A., & Ebrahimi, S. A. (2021). Historical analysis of the causes of delay in oil industry projects. Journal of Improvement Management, 15(3), 145–173. https://doi.org/10.22034/jmi.2021.287575.2576[In Persian]
Bouakez, H., Rachedi, O., & Santoro, E. (2025). The sectoral origins of heterogeneous spending multipliers. Journal of Public Economics, 248, 105404. https://doi.org/10.1016/j.jpubeco.2025.105404
Dizaji, S. F., & Farzanegan, M. R. (2024). The impact of U.S. trade sanctions on the global trade of target countries: Do the political institutions of the targets matter? CESifo Working Paper No. 10910. https://doi.org/10.2139/ssrn.4711267
Emami, S. (2024). Beyond Sanctions: The Resistance Economy as the Islamic Republic of Iran’s Policy Discourse for Economic Independence. Journal of World Sociopolitical Studies, 8(1), 171-201. https://doi.org/10.22059/wsps.2024.371398.1408
Ershadi,M. J. and Zanganeh,N. (2025). Study and analysis of factors affecting the total productivity of investment development support funds in the agricultural sector. Journal of Improvement Management, 19(4), 144-171. https://doi.org/10.22034/jmi.2025.530977.3215 [In Persian]
Faiz, A., & Jamil, S. (2025). Economic sanctions, resistance economies and authoritarian adaptation: A comparative study of Iran's resilience from Rouhani to Raisi. Annals of Human and Social Sciences, 6(4), 166–176. https://doi.org/10.35484/ahss.2025(6-IV)13
Ghavi Del, E., Farahani Fard, S., & Mohammadi Nasab, M. (2019). Effects of the Moghavemati economics model approach in the agriculture sector. Quarterly Journal of Macro and Strategic Policies, 6(Resistive Economy), 790–807. https://doi.org/10.32598/JMSP.6.Special.Issue.790 [In Persian]
Itskhoki, O., Ribakova, E., & Peterson, P. G. (2024). The economics of sanctions: From theory into practice. Brookings Papers on Economic Activity, 2024(2), 425–497. https://doi.org/10.1353/eca.2024.a964374
Jabari, L., Salem, A. A., Zamani, O., & Farzanegan, M. R. (2024). Economic sanctions, energy efficiency, and environmental impacts: Evidence from Iranian industrial sub-sectors (MAGKS Papers on Economics No. 202403). Philipps-Universität Marburg, Faculty of Business Administration and Economics. https://doi.org/10.13140/RG.2.2.13566.77128
Ketels, C. H. M., & Duch, E. (2022, July). Industrial policy in a new global reality: Towards a more location- and sector-driven approach. World Bank, Private Sector Development Blog. https://www.hbs.edu/faculty/Pages/item.aspx?num=62809
Kuźnar, A., & Marczewski, K. (2024). Economic sanctions – Iran’s trade dynamics through constant market shares model lens (SSRN Working Paper). https://ssrn.com/abstract=4908366
Mahdiloo, A., Abolhasani Histani, A. and Rezaei, M. (2019). Ranking of Economic Sanctions and Estimating Hazard of Sanctions Index Using Fuzzy Analytical Hierarchy Process. Applied Theories of Economics, 6(2), 47-72. https://ecoj.tabrizu.ac.ir/article_8772.html?lang=en [In Persian]
Mamonov, M., & Pestova, A. (2022). The price of war: Macroeconomic and cross-sectional effects of sanctions on Russia. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4190655
Mokhtari, A., & Ramavandi, B. (2025). Analysis of the development of the petrochemical industry in Iran and associated environmental effects. Journal of Industrial Sociology, 1(2), 59–80. https://doi.org/10.22034/jis.2025.2056170.1027[In Persian]
Nosratabadi, J. (2023). The effect of trade sanctions on employment through total factor productivity. International Economics and Economic Policy, 20(1), 163–187. https://doi.org/10.1007/s10368-023-00555-y
NPO (National Productivity Organization of the Islamic Republic of Iran). (2025, April 25). Productivity indicators system: Macro productivity indicators by sectors based on SNA2008 (1390–1402) [Report]. National Productivity Organization of I.R. Iran. https://www.npo.gov.ir/productivity-indicators-system-faild [In Persian]
Özdamar, Ö., & Shahin, E. (2021). Consequences of economic sanctions: The state of the art and paths forward. International Studies Review. https://doi.org/10.1093/isr/viab029
Safaei KouchakSaraei, F., Bagherzadeh, M. R., Mehrara, A., & Gholipour-Kanani, Y. (2021). Analysis and explanation of key stakeholders in technology transfer (foreign direct investment) in the public sector of Iran. Science and Technology Policy Letters, 11(2), 54–65. https://dor.isc.ac/dor/20.1001.1.24767220.1400.11.2.11.1 [In Persian]
Sezavar, M. R. (2021). A macroeconometric model with mixed-frequency data sampling to predict the effects of sanctions and policy-making in the Iranian economy (Doctoral dissertation, Shahid Beheshti University). IranDoc. https://ganj.irandoc.ac.ir/#/articles/583d943756f7f012885104a273a4c439 [In Persian]
Talari, M., & Binandeh, A. (2020). Historical trend of coopetition and developing a comprehensive model of coopetition strategy under sanctions condition. Journal of Improvement Management, 14(1), 95–126. https://doi.org/10.22034/jmi.2020.107069 [In Persian]
Vasfi Asfestani, S., Abolhassani Hastiani, A., Shaygani, B., & Amini Milani, M. (2022). The effects of trade sanctions on Iran’s economy using a computable general equilibrium approach: Focusing on production and prices. Quarterly Journal of Economic Research and Policies, 30(103), 7–47. http://qjerp.ir/article-1-3139-fa.html [In Persian]
Zaman, M. (2024). Total factor productivity, transitional dynamics and endogenous growth accounting for Latin America: Evidence from two centuries’ data. Economics of Transition and Institutional Change, 32(1). https://doi.org/10.1111/ecot.12411
Abdeshahi,A A , Vahdati,H and Hakkak,M . (2026). Industry as the Engine of Productivity in Iran’s Economy under Sanctions. Journal of Improvement Management, (), 1-29. doi: 10.22034/jmi.2026.568030.3276
MLA
Abdeshahi,A A , , Vahdati,H , and Hakkak,M . "Industry as the Engine of Productivity in Iran’s Economy under Sanctions", Journal of Improvement Management, , , 2026, 1-29. doi: 10.22034/jmi.2026.568030.3276
HARVARD
Abdeshahi A A, Vahdati H, Hakkak M. (2026). 'Industry as the Engine of Productivity in Iran’s Economy under Sanctions', Journal of Improvement Management, (), pp. 1-29. doi: 10.22034/jmi.2026.568030.3276
CHICAGO
A A Abdeshahi, H Vahdati and M Hakkak, "Industry as the Engine of Productivity in Iran’s Economy under Sanctions," Journal of Improvement Management, (2026): 1-29, doi: 10.22034/jmi.2026.568030.3276
VANCOUVER
Abdeshahi A A, Vahdati H, Hakkak M. Industry as the Engine of Productivity in Iran’s Economy under Sanctions. JMI. 2026;():1-29 (In Persian). doi: 10.22034/jmi.2026.568030.3276
