Editorial
Research Paper
Parisa Mohajeri; Reza Taleblou; Aylar Rahnama
Abstract
Based on the theory of market timing in the framework of capital structure, the time of issuing stock depends on the stock prices. In that way, managers are issuing shares that have a high ratio of market value to book value. In fact, issuing shares is in the best interest of the firm when the company's ...
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Based on the theory of market timing in the framework of capital structure, the time of issuing stock depends on the stock prices. In that way, managers are issuing shares that have a high ratio of market value to book value. In fact, issuing shares is in the best interest of the firm when the company's stock in the market is more than actually valued. In this paper, by using panel data of 55 firms listed in the Tehran Stock Market during the 2003 to 2018, we investigate the impact of market timing on capital structure. The estimated model in this paper is a partial dynamic model using the Generalized Method of Moment (GMM) and Arrelano-Band Estimates. The findings indicate that: one- market timing has affected the firm`s capital structure of Tehran Stock Exchange.Two- market condition has a significant negative effect on capital structure which means that in the hot markets, managers issue more equity and less debt. Three- firm size and tangible assets have significant positive effects on leverage ratio. In fact, the larger firms with more tangible assets face lower default risks, thus they have relatively more debt. Four- profitability variable influences corporate leverage negatively. Five-sanction and exchange rate variables have negative significant effects on capital structure.
Research Paper
Energy Economics
Hossein Amiri; Mohammad Hossein Karim; Fariba Asadi
Abstract
Despite the high potential of geothermal reservoirs in Meshkinshahr, we only see the government entering the electricity extraction of geothermal energy because the cost of the Meshkinshahr geothermal electricity is higher than the balanced price of the electricity market and the private sector is disadvantaged ...
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Despite the high potential of geothermal reservoirs in Meshkinshahr, we only see the government entering the electricity extraction of geothermal energy because the cost of the Meshkinshahr geothermal electricity is higher than the balanced price of the electricity market and the private sector is disadvantaged for entering it. So, the government has adopted a feed in tariff policy for geothermal electricity to encourage private sector investors. This research is aimed at financial appraisal of Maskinshahr geothermal power plant with the assumption of feed in tariff by the government with Equivalent Uniform Annual Worth, Equivalent Uniform Annual Worth, and Equivalent Uniform Annual Cost methods. Equivalent Uniform Annual Benefit is obtained from feed in tariff of government and Equivalent Uniform Annual Cost is determined based on technical and economic components of the geothermal power plant and macroeconomic parameters. The results of the data analysis show that the construction of the geothermal power plant is fully justified with the 14% reduction rate, but if the investor's minimum expected rate exceeds 54%, the construction of the power plant has no economic justification. Also, if the construction of Meshkinshahr geothermal plant takes more than 13 years and 5 months like the government project, the generation of geothermal power is not cost-effective.
Research Paper
Other
Ahmed Taruwere Yakubu; Ismail Aremu Muhammed
Abstract
Transport Infrastructural Development, specifically, road transport infrastructure has been argued to play an important role in the growth of economic activities. In this way, countries all over the world, Sub-Sahara African countries alike, have made critical efforts to improve the quality of this infrastructure. ...
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Transport Infrastructural Development, specifically, road transport infrastructure has been argued to play an important role in the growth of economic activities. In this way, countries all over the world, Sub-Sahara African countries alike, have made critical efforts to improve the quality of this infrastructure. However, the results of these efforts have not been felt much in Sub-Sahara African countries. The quality of road networks in Sub-Sahara African countries is relatively low to countries of other regions of the world. This has motivated this study to investigate the factors that determine the quality of road infrastructure, particularly, the role of fiscal transparency. The panel ARDL method, with a focus on its pooled-mean group (PMG), mean group (MG) and dynamic fixed effects (DFE) estimators was employed on the annual panel data of 34 Sub-Sahara African countries over the 2006 – 2018 periods. Also, Dumitrescu-Hurlin panel Granger non-causality were conducted to determine the casual relationship between fiscal transparency and quality of road transport infrastructure. The findings of the study revealed that more transparent fiscal activities are important to improve the quality of road transport infrastructure in Sub-Saharan Africa in the long run, with coefficient value of 0.008. More so, public debt and private investment are critical to long-run improvement in the quality of road infrastructure in the region (with coefficient values of 0.022 and 0.102 respectively). Therefore, the study recommended that better transparency of fiscal activities should be strengthened in these countries to achieve better quality of road transport infrastructure.
Research Paper
Environmental Economics
Mehran Zarei; Zahra Nasrollahi
Abstract
The article is grounded on the rapid demand growth and supply constraints, which have imposed unprecedented pressure on water resources in Iran. Virtual water import has been recently discussed as a policy to tackle water scarcity and so the study calculates (with input-output technique) virtual water ...
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The article is grounded on the rapid demand growth and supply constraints, which have imposed unprecedented pressure on water resources in Iran. Virtual water import has been recently discussed as a policy to tackle water scarcity and so the study calculates (with input-output technique) virtual water flows between Iran and European Union (EU 28) in 2011. The results show that Iran has been a net importer of virtual water in trade with the EU28, with net imports of about 667 million m3. The largest Virtual Water Export from Iran to the EU28 are respectively to Germany, Spain and Italy, which accounted for more than 74% of the total virtual water exports. By contrast, the Netherlands, Germany and Austria have been the largest virtual water exporters to Iran, with a total share of over 68.8% of the total. In any case, while Iran's virtual water import from the EU28 is about 2 times as much as virtual water exports, the value of Iran's imports from the EU28 is more than 7.6 times of its exports. An indicator developed shows that Iran's exports to the EU are high water-intensive but Iran's imports from the European Union are low water intensive.
Research Paper
Institutional Economics
Maliheh Pourali; Hadi Amiri; Vahid Moghadam; Alireza Kamalian
Abstract
The economy is full of opportunities through which individuals have to decide under different rules. Modeling individuals' behaviors under these additional rules are pursued in experimental economics. The present paper addresses some of the critical institutional questions in governance in the Iranian ...
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The economy is full of opportunities through which individuals have to decide under different rules. Modeling individuals' behaviors under these additional rules are pursued in experimental economics. The present paper addresses some of the critical institutional questions in governance in the Iranian economy, using experimental economics. The data were collected and created out of 480 simulation runs of joint pool resource harvesting where resource users had asymmetric power for harvesting the resource. Alternative institutional arrangements, each representing different governance of natural resources, were simulated in these experiments. This paper concentrates on the three factors of harvesters' communication, the origin of regulations (the harvesters or the government), and rule enforcement (the amount and probability of violators' fines). The results indicate that in the situations where participants are allowed to regulate, harvesting the natural resource is equal to where the government is in charge of regulating. For an external regulation, the worst way to harvest it is when the government fails to guarantee the rule enforcement (the probability of a fine is low). Under such circumstances, resource harvesting is even more unequal than the open-access state. Exogenous regulation leads to crowding-out altruistic motivations.
Research Paper
Social Economic
Fatemeh Bazzazan
Abstract
Tourism has not been a growing sector in Iran in recent decades due to political conflicts with the west. Still, there is hope that it grows after lifting the economic and monetary sanctions and may bring both political and economic stability and more foreign tourists to Iran. This paper aims to study ...
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Tourism has not been a growing sector in Iran in recent decades due to political conflicts with the west. Still, there is hope that it grows after lifting the economic and monetary sanctions and may bring both political and economic stability and more foreign tourists to Iran. This paper aims to study the distributional impact of foreign tourist spending in Iran using structural path analysis (SPA) within the SAM framework. The primary databases are the 2011 SAM and foreign tourism spending in 2018. According to the SAM multiplier results, high-income groups benefit significantly from foreign tourists spending and generates more inequality between ten deciles of urban and rural household income groups. Moreover, the SPA approach results indicate that most of the paths affecting household income pass through production factors. Evaluating production factors reveal that mixed-income has a significant contributor to intermediate paths., Its share in global influence for higher-income groups is significantly greater than middle- and low-income groups. Global influence also reveals that compensation of employees for lower household income groups would be affected sharply.
Research Paper
Institutional Economics
Mohamad Mahdi Kamal; Hadi Amiri; Vahid Moghadam; Darrius Rahimi
Abstract
The Dictator Game can describe many environmental challenges. That is the conditions where exploiters have asymmetric power in exploitation. For solving such environmental problems, solutions have been proposed, several of which focus on exogenous factors and others on characteristics of users. In this ...
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The Dictator Game can describe many environmental challenges. That is the conditions where exploiters have asymmetric power in exploitation. For solving such environmental problems, solutions have been proposed, several of which focus on exogenous factors and others on characteristics of users. In this research, we are looking for a solution to one of these problems in the field of water for Iranian exploiters. To do this, we used experimental economics in the context of institutional analysis and development framework. The game was played in 19 groups of 5 participants with 1767 observations and then estimated using an econometrics model. This study showed that creating a club good downstream of the river and supporting local regulation (along with intra-system monitoring) can enable water distribution to occur more uniformly among users. Additionally, supporting local regulation has more substantial effects than the creation of club goods in water distribution. Furthermore, the data analysis obtained through the experiment and Ring Game shows that if the upstream exploiters have an other-regarding social value orientation, it produces positive effects on the exploit of other people so that the downstream exploiters also benefit from water. Thus, this research can have some implications for solving Iran's environmental problems similar to the dictator game.
Research Paper
Social Economic
Sajjad Barkhordari; Naser Ali Azimi
Abstract
Moving towards a knowledge-based economy is an important factor for developing countries. Achieving this goal requires improving different pillars such as innovation. Governance quality is a key factor to create innovation pillars and improve innovative activities. In this paper, we describe the impact ...
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Moving towards a knowledge-based economy is an important factor for developing countries. Achieving this goal requires improving different pillars such as innovation. Governance quality is a key factor to create innovation pillars and improve innovative activities. In this paper, we describe the impact of governance quality on improving innovation in selected MENA countries during 2009-2018. We used an empirical model and panel data method to describe the relationship between governance quality and innovative activities by considering control variables such as inflation, domestic credit provided by the financial sector (%GDP), the net inflow of foreign direct investment (FDI), and trade (%GDP). Empirical results indicate that the governance quality has a positive and significant effect on the performance of innovation in MENA countries. The positive effect of the governance quality sub-indices indicates that an improving institutional environment is necessary to stimulate innovation activities. The results also show that trade in MENA a country not only harms but also discourages innovative activities. According to empirical results, we propose that improving governance quality concentrated on government effectiveness and control of corruption is essential for innovative activities in MENA countries.
Research Paper
Econometrics
Amin Aminimehr; Ali Raoofi; Akbar Aminimehr; Amirhossein Aminimehr
Abstract
In this research, the impact of different preprocessing methods on the Long-Short term memory in predicting the financial time series was examined. At first, the model was implemented on the Tehran stock exchange index by utilizing the Principal Component Analysis (PCA) model on 78 technical indicators. ...
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In this research, the impact of different preprocessing methods on the Long-Short term memory in predicting the financial time series was examined. At first, the model was implemented on the Tehran stock exchange index by utilizing the Principal Component Analysis (PCA) model on 78 technical indicators. Then, the same model was implemented by the advantage of the random forest to select features rather than the PCA to extract them. In the next step, other technical strategy dummy variables were added to the model to examine the changes in its performance. Finally, two deep learning methods with the advantage of only target lags were deployed to compare the accuracy to the other models. The first deep model was plain but the second one was with the advantage of the Wavelet denoising process. The results of the MSE, MAE, MAPE, and R2 score on unseen test sequences showed that applying the Long Short-Term Memory with its own deep feature extraction procedure and the wavelet’s denoising process leads to the best accuracy in prediction of the Tehran stock exchange index. Finally, the Diebold Mariano test exposed a significant difference between the accuracy of the best model and the rest. This result implied that although the application of deep learning gains accurate results, it can be alleviated by feeding the model with creatively extracted and denoised features.
Research Paper
Public Economics
Shahryar Zaroki; Mastaneh Yadollahi Otaghsara
Abstract
This study investigates the effects of real minimum wage on informal employment in rural and urban areas of provinces of Iran between 2005 and 2018. For this aim, by applying microdata on the income-expenditure plan of urban and rural households and with the aid of the minimum wage index, the ratio of ...
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This study investigates the effects of real minimum wage on informal employment in rural and urban areas of provinces of Iran between 2005 and 2018. For this aim, by applying microdata on the income-expenditure plan of urban and rural households and with the aid of the minimum wage index, the ratio of informal employment to total employment was calculated. Preliminary data analysis shows that one-third of urban employees and more than half of rural employees are engaged in informal occupations during this period. Then, the research model was estimated using the panel data method. Estimating the random effects model shows that the real minimum wage and tax burden positively affect informal employment in urban areas. In rural areas, the estimation using the Fixed effects method (and FGLS estimator) shows that real minimum wage, tax burden, and Gini coefficient positively affect informal employment. Furthermore, the interactive effect coefficient of real minimum wage considering the unemployment rate illustrates that in urban areas, the increase of unemployment rate increases the positive effect of real minimum wage. In rural areas, the increasing unemployment rate reduces the positive effect of the real minimum wage
Research Paper
Fereshteh Vaezi; seyed jafar sadjadi; Ahmad Makui
Abstract
One of the most important problems in portfolio selection models is the ability to provide the optimal number of each share. Therefore, in some cases, it interferes with portfolio optimization in converting the desired weight per share to the desired number per share, unless the results are an integer. ...
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One of the most important problems in portfolio selection models is the ability to provide the optimal number of each share. Therefore, in some cases, it interferes with portfolio optimization in converting the desired weight per share to the desired number per share, unless the results are an integer. Moreover, by applying the appropriate strategy, it seems possible to discover the optimal stock allocation for significant cases with comparatively large stock value. In this regard, this study presents a multi- objective portfolio selection model considering cardinality, quantity and budget constraints based on a new improved knapsack problem. Value-at-Risk (VaR) is considered as the second objective function of risk assessment in the knapsack-based portfolio selection model. We consider parametric (variance- covariance matrix) and non-parametric (historical) approaches to measure VaR. The study also uses the best GARCH family models to estimate the conditional volatility of return in the variancecovariance matrix, which is based on measuring and comparing different criteria under various types of GARCH family models. Finally, a Non-dominated Sorting Genetic Algorithm II (NSGA II) is planned to solve the problem. An actual portfolio of the Iran stock market is solved to demonstrate the application of the suggested model.
Research Paper
International Economics
Anvar Khosravi; Saeed Daei-Karimzadeh; Behrooz Shahmoradi; Heirsh Soltanpanah
Abstract
Achieving sustainable development in the future requires investing in productive capabilities that lead to export diversification. Given the importance of the chemical industry as a strategic industry around the world, especially in Iran, and its effect on upstream and downstream industries, determining ...
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Achieving sustainable development in the future requires investing in productive capabilities that lead to export diversification. Given the importance of the chemical industry as a strategic industry around the world, especially in Iran, and its effect on upstream and downstream industries, determining the optimal export diversification strategy in this sector is critical. In this regard, the theory of economic complexity will be used as a basis for identifying high-potential opportunities for export diversity and the theory of product space will be applied which is a powerful tool for identifying strategies. Using export data of chemical products (2014-2018) in 128 countries, we drew product space for Iran. Based on revealed comparative advantages of more than one, results for Iran show that out of 921 six-digit chemical products of the harmonized system, 295 product codes has potential to be activated. Subsequently, by adding two new constraints to the model, potentially activate products were reduced to 145 products. Next, by implementing five strategies: random, greedy, high degree, low degree and majority on Iran's chemical products network, an integration of greedy and majority strategies has been shown to minimize network activation time. Finally, by merging these two strategies, the optimal strategy was identified, and 145 products were prioritized in order to improve export diversity.
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