Editorial
Research Paper
International Economics
Parisa Mohajeri; Ali Asghar Banouei
Abstract
Traditional trade theories and/or “Trade-in-Goods” predict that exports can generate 100% value-added which has recently been debated by Trade-in-Tasks theories. The root of these debates are referred to the existing conventional macro-economic accounting, which is expressed that expenditure ...
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Traditional trade theories and/or “Trade-in-Goods” predict that exports can generate 100% value-added which has recently been debated by Trade-in-Tasks theories. The root of these debates are referred to the existing conventional macro-economic accounting, which is expressed that expenditure components of final goods including gross exports (GE) equals to total value is consumed in each country. It means that a country’s GDP is the sum of its domestic final demand including GE. Generating 100% value added in domestic final demand may hold true but GE due to double counting may not generated 100% value added for the domestic economy. In addition to that domestic value added (DVA) has a nice property with Vertical Specialization (VS) in such a way that the sum of their shares are equal to one and therefore, can measure the degree of VS in trade. In this article, we take this issue as a starting point and for the first time try to analyze it with the following questions: What amount of DVA should be attributed to GE from Iran? What is the relationship between DVA and VS? We apply two methods of Hypothetical Extraction (HEM) and VS. Using the latest Input-Output Tables (IOTs) of 2011 and 2001 in Iran. The overall findings are as follows: One- the share of DVA in GE in 2001 is 95.02%, downs to 93.33% in 2011 and the shares of residual as an overestimation of GE are 4.98% and 6.67% for each year respectively. Second there is an inverse relationship between DVA and VS shares for both years. Third- the considerable large shares of DVA followed by small shares of VS suggest that Iranian economy is at the beginning of production chains with non-symmetric trade pattern.
Research Paper
Energy Economics
Ebrahim Hadian; Ali Hossein Ostadzad
Abstract
The pertinent question is whether scarcity of non-renewable energy resources limits economic growth. Given that the earth's natural resources are limited, the answer appears to be yes. However, there are two reasons to reject this question. Technological advancements that conserved resources may be able ...
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The pertinent question is whether scarcity of non-renewable energy resources limits economic growth. Given that the earth's natural resources are limited, the answer appears to be yes. However, there are two reasons to reject this question. Technological advancements that conserved resources may be able to eliminate resource scarcity. Additionally, countries can import resources from other countries. This paper aims to develop an endogenous growth model with stochastic exhaustible energy resources and use it to explain the economy's steady state behavior. We consider the uncertainty associated with extractable energy resources and then develop a stochastic growth model on this basis.Additionally, we solve this model analytically using the Stochastic Hamilton-Jacobin-Bellman method (SHJB method). Finally, for the Iranian economy, we apply the analytical solution. The primary findings indicate that as natural resource extraction becomes even more uncertain, the rate of economic growth slows, which results in a subsequent decline in the rate of resource extraction. Furthermore, we observe that the variance in energy extraction in the Iranian economy is approximately 0.22. Under these conditions of uncertainty, the optimal economic growth rate in a steady state will be 7.1 percent with an extraction rate of 1.1 percent.
Research Paper
International Economics
Mirreza Fazelian; Khadije Nasrollahi; Hadi Amiri
Abstract
Abstract:The purpose of this research is to criticize the Iranian governments’ policies supporting the Foreign Direct Investors. In this regard, 243 questionnaires have been distributed among actual investors (active in the country) and 107 questionnaires among potential ones; by collecting and ...
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Abstract:The purpose of this research is to criticize the Iranian governments’ policies supporting the Foreign Direct Investors. In this regard, 243 questionnaires have been distributed among actual investors (active in the country) and 107 questionnaires among potential ones; by collecting and applying Heckman two-step model, we analyzed them. Uusing Heckman two-step model was necessary because factors influencing potential investors’ behaviors to come or not to Iran were not necessarily the same as the factors influencing the amount of investment inflows by actual investors. Accordingly, in this article, the soft dimension of business environment (encompassing incertitude due to Political Instability, Xenophobia, ...) is differentiated from its hard dimension (encompassing Bureaucratic Environment, Government Executive Inability, ...) which can influance on the way that these dimensions impact on investor’s behavior. The results indicate that while in deciding to come to Iran, the investors only consider the soft dimension and its decisive importance, policy making in the field of Foreign Direct Investment (FDI ) are concentrated only on hard dimensions of the matter. For investors, deciding to enter Iran, the soft dimension is important to them, not the hard dimension, but after entering the country, hard dimensions also becomes important, so that if the country's status is suitable in terms of hard dimensions, actual investors will be more motivated to develop their business and bring more capital in to the country. Improperly prioritizes issues that the investors face, can be one of the failure factors of current policy making to attract real investors.
Research Paper
International Economics
Hassan Daliri
Abstract
This paper concentrates on the impact of foreign direct investment (FDI) on economic growth in different country income levels. This study is based on 79 countries into four income groups (31 High income, 18 Lower middle income, 21 Upper middle-income, and 9 Low-income countries) for the period 1990-2019. ...
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This paper concentrates on the impact of foreign direct investment (FDI) on economic growth in different country income levels. This study is based on 79 countries into four income groups (31 High income, 18 Lower middle income, 21 Upper middle-income, and 9 Low-income countries) for the period 1990-2019. Our estimations make use of panel quantile regression techniques. This article’s results show that the impact of FDI on economic growth appears to change with a country's growth level. The empirical results show that in countries with high income, medium-upper income levels, the influence of FDI on economic growth is always positive. Of course, there is a negative link between FDI and economic growth in the lower-income and the 30th percentile in medium-lower income. We obtained evidence that the growth effect of FDI is conditional upon the level of income and growth in host countries. The impact of FDI on economic growth depends on the countries income level. FDI is particularly suitable for economic growth in countries with higher GDP growth. In countries with medium-upper income levels of income, the influence of FDI on economic growth is greater than other income groups.
Research Paper
Energy Economics
Mohammad Sayadi
Abstract
Given the 95% share of electricity generation from non-renewable energies, implementing effective policies to motivate electricity generation from sustainable energy resources is essential. Since the current Feed-in Tariff (FiT) policy increases the government’s expenditures to support renewable ...
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Given the 95% share of electricity generation from non-renewable energies, implementing effective policies to motivate electricity generation from sustainable energy resources is essential. Since the current Feed-in Tariff (FiT) policy increases the government’s expenditures to support renewable energies, a real options (RO) model is proposed to estimate solar power generation incentive subsidy. Moreover, establishing a carbon emission trading (CET) scheme under uncertainty is proposed, and sensitivity analysis is conducted for the project value, threshold value, and subsidy. Our results show that establishing a CET market could significantly reduce the economic costs of achieving renewable energy promotion goals. Based on the net present value (NPV) and RO criteria, in the case “with the possibility of CET,” the amount of incentive subsidy that should be paid to electricity generation from a solar project (case of a 5 kW plant) are 37.49 and 42.42 million Rials/kW, indicating 20% and 12% reduction compared to the base case (without the possibility of CET), respectively. The results also indicate that more electricity price volatility can increase the incentive subsidy while enhancing the market price of electricity can slightly decrease the required subsidy, which triggers solar investment.
Research Paper
International Economics
Zahra Mahdavi Sabet; Mohammad Ali Abdolvand; Kambiz Heidarzadeh; Mohsen Khounsiavash
Abstract
Organizations enter into the international competitive markets because of different motivates such as: gaining international reputation, achieving long-term growth, increasing profitability, taking advantages of economies of scale, domestic market maturity, the intensity of competition in domestic market, ...
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Organizations enter into the international competitive markets because of different motivates such as: gaining international reputation, achieving long-term growth, increasing profitability, taking advantages of economies of scale, domestic market maturity, the intensity of competition in domestic market, governmental rules and regulations; but actually all of the companies concerns of organizations is to improve export performance. Given the sanctions on the oil industry in Iran and the lack of a comprehensive model of export performance of Iranian petroleum products, this research can help improve and develop this industry in global markets. The statistical society of this mixed research method includes Iranian Petroleum Exporters Association. According to the first qualitative research, non-probability and snowball sampling method was used in this research; for gathering information, 7 semi-structured depth interview was used. Regarding the quantitative research in the second study, probable and random sampling method was used in this research. A Likert Spectrum Questionnaire of 5-point scale was used to gather information. In the first study, after open, pivotal and selective coding and using Atlas qualitative software, recommended antecedents of Iranian oil products export performance includes: market orientation, marketing mix, company resources, and macro environmentand export performance itemsof Iranian oil products includes: financial performance, customer retention and customer satisfaction. In the second study, 19 variables with several cases and continuity domains were proposed. 57 items were used to measure structures and all 16 hypotheses were supported.
Research Paper
Monetary economics
Mohammad Feghhi Kashani; Majid Omidi
Abstract
This paper is an endeavor towards investigating the potential role of deposit market structure as a distinct channel for (monetary, fiscal, and regulatory) policy transmission mechanism. In doing so, we have developed the core idea in a rational expectation partial equilibrium setup incorporating the ...
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This paper is an endeavor towards investigating the potential role of deposit market structure as a distinct channel for (monetary, fiscal, and regulatory) policy transmission mechanism. In doing so, we have developed the core idea in a rational expectation partial equilibrium setup incorporating the possibility of contagion risk in the banking system. This has enabled us to build up more sensible analytical findings within a tractable structure which is capable of making diverse equilibria spotted in some empirical evidence. The setup/paper lays down conditions under which one could expect Nash equilibria involving, inter alia, “limited price war”, “deposit rates rat race”, “bank run”, and “systemic banking crisis” followed by incidents of “banking panic”. This multiplicity in equilibria is the result of interaction between the deposit market structural characteristics and policy commands due to externalities originating from strategic complementarity/substitution among the rivalry banks in the market. Further the paper explores the allocation and stabilization efficiency implications in terms of conceivable equilibria for deposit rates, deposit market share, expected net returns, expected markup, and the level of expected effort of banks operating in the banking system with an emphasis on the role of equity capital in between.
Research Paper
Monetary economics
Ali Afzali; Ali Taiebnia; Mohsen Mehrara
Abstract
Credit is the basis for financing and stimulating investments. However, excess credit can be the source of systemic risks and financial crises. In this paper, using Iran’s credit data from 2000 to 2019, the Basel credit gap was calculated as a recommended indicator for measuring excessive credit. ...
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Credit is the basis for financing and stimulating investments. However, excess credit can be the source of systemic risks and financial crises. In this paper, using Iran’s credit data from 2000 to 2019, the Basel credit gap was calculated as a recommended indicator for measuring excessive credit. We perceive that in the years in which the economy is suffering from currency overvaluation; for example, from 2005 to 2011, excess credit is noticeably visible. Moreover, in periods with a fair exchange rate, for instance, from 2000 to 2004, no excess credit was observed. Using capital buffers is an essential regulatory policy to reduce the risk of excess credit. So, the counter-cyclical capital buffer was calculated for all these periods. We also found that Basel’s credit gap has good power in predicting exchange crises in Iran. It seems that the root cause of excessive credit and foreign currency jumps should be sought in the exchange rate-based stabilization plan in Iran (exchange rate anchor). Nonetheless, policymakers can reduce the probability and severity of crises by strengthening the bank credit sector’s regulatory systems and using the proposed buffers.
Research Paper
Institutional Economics
Zahra Kheiridoust; Farshad Momeni; Amir khadem Alizadeh; Bahareh Nasiri
Abstract
Cultural, social, and economic changes are closely correlated, however, understanding such a relationship requires a theoretical model. The current paper has provided a conceptual model for explaining the relationship between culture and economy. Some economists consider culture as resistant to change ...
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Cultural, social, and economic changes are closely correlated, however, understanding such a relationship requires a theoretical model. The current paper has provided a conceptual model for explaining the relationship between culture and economy. Some economists consider culture as resistant to change and some others consider it very flexible. Moreover, some consider cultural values as universal and some as specific to societies. The purpose of this paper is to outline the relationship between these theories and provide a model for the complicated relationship between culture and economic development and understand cultural stabilization and changes. The main question is why some societies are incapable of expanding universal values. We applied conceptual discourse analysis. The analyses are performed in the "new institutional economics" framework. Three issues were discussed: First of all the speed and orientation of cultural changes, then the process of socialization and cultural transfer. The relation between culture and formal institutions and also the Hobbesian problem are the last issues covered in this paper to build a model of cultural stabilization and change in a developing economy.
Research Paper
Other
Meymanat Ebrahimi; Mohammad Vaez Barzani; leila Torki; Hassan Heydari
Abstract
In this paper, the impact of monetary shocks on asset changes and the financial liabilities of different institutional sectors were examined. Afterwards, financial and non-financial tools of the private sector’s balance sheet in the funds flow account were analyzed. For this purpose, the data from ...
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In this paper, the impact of monetary shocks on asset changes and the financial liabilities of different institutional sectors were examined. Afterwards, financial and non-financial tools of the private sector’s balance sheet in the funds flow account were analyzed. For this purpose, the data from 1973 to 2017 of the factor-augmented vector autoregressive (FAVAR) model was employed. Results show that expansionary monetary shock has led to a rise in the assets and financial liabilities belonging to institutional sectors in the first year. With regard to the private sector and the financial tools of its balance sheet, monetary shock significantly impacts this sector’s long-term deposit while it has a weak insignificant impact on the short-term deposit. The monetary shock also has a strong significant impact on the private sector’s taking long-term loans while it has a weak insignificant impact on the short-term loans taken by the same sector. Regarding the non-financial tools of this sector, the expansionary monetary shock has a positive effect on the construction and machinery investment in the short run. In the long run, however, the two variables’ responses are reversed which indicates the negative effect of monetary shock caused by an increase in oil revenues on the private sector’s investment in both the construction and the machinery sector. As a result, it can be concluded that the oil revenue reduces the private sector’s relative size in Iran economy.
Research Paper
Monetary economics
Esmaeil Jafarimehr; bahram sahabi; Hassan Heydari
Abstract
Recent financial literature argues that there are gender differences between men and women, impacting financial decision making and performance. This paper, using data related to micro-loans of an Iranian private (commercial) bank between 2012 and 2018, investigates the effects of the characteristics ...
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Recent financial literature argues that there are gender differences between men and women, impacting financial decision making and performance. This paper, using data related to micro-loans of an Iranian private (commercial) bank between 2012 and 2018, investigates the effects of the characteristics of the members of the branch credit committees (BCCs), especially gender, on loan quality. Because, the dependent variable (loan quality) is a discrete ordinal variable and based on the Brant test’s result the proportional odds assumption was violated, the generalized ordinal logit model was used. The results of this paper show that increasing the presence of women in BCC improves the quality of micro-lending. Based on the literature and related studies, a potential explanation for these results is that increasing the number of women in the BCC improves the compliance of the decision-making and lending processes with the credit guidelines and recommendations, increases the BCC risk aversion, and reduces the agency problem by improving monitoring in the BCC. Moreover, the results also show that the quality of micro-lending management by BCCs with a higher average age is poorer than that of a younger BCC, and the higher education of the BCC members improves micro-lending quality.
Research Paper
Other
Azam Jalaei; Nematollah Akbari; Bbabak Saffari
Abstract
One of the important tools to increase supply chain productivity and reduce logistics costs is to establish logistics hubs. Since there is no logistics hub in the central region of Iran, this study was conducted to identify a suitable area for a logistics hub in Isfahan province. In this line, criteria ...
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One of the important tools to increase supply chain productivity and reduce logistics costs is to establish logistics hubs. Since there is no logistics hub in the central region of Iran, this study was conducted to identify a suitable area for a logistics hub in Isfahan province. In this line, criteria influencing the location of the logistics centers in terms of certain limiters (geological and environmental factors) and cost influencer (measurable factors with quantitative values (compensation criteria)) criteria were identified, and then, the process of locating was implemented in two separate phases. In the first phase, geographical boundaries associated with limiters criteria were excluded from the study scope to identify the potential site options for a logistics hub within the province. In the second phase, the mathematical modeling approach was used to model the total cost of the logistics network. Next, the cost of establishing a logistics hub was calculated in possible sites in terms of cost influencer criteria and using geographic data layers. The findings revealed that the optimum location is in the central part of the province, where all the economic activities are concentrated. Still, rail and road infrastructures and industries are the most influencers in the optimum location.
other
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