International E-Conference on Economy under sanctions 22 September 2013.

Slides:



Advertisements
Similar presentations
Determinants of Foreign Direct Investment in Landlocked and Least Developed Countries- Analysis with a focus to Malawi.
Advertisements

Capital Structure Theory
An Overview and Examination of the Malaysian Services Sector Lisa Alejandro Jennifer Baumert Powell Samantha Brady Pham Isaac Wohl Office of Industries,
UNIT 1 CONCEPT OF MANAGERIAL ECONOMICS (continue)
Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies Conference „Innovation:
Trade Liberalization, FDI, and Productivity Growth: Russian experience.
Macroeconomics Unit 17 Global Macroeconomic Issues.
Aggregate Demand and Supply
Much ado about nothing? Do domestic firms really benefit from foreign direct investment? Holger Görg and David Greenaway Leverhulme Centre for Research.
Saving, growth and the current account Daan Steenkamp ERSA / SASI Savings workshop August 2009.
0 Productivity Growth and Convergence in Vietnamese Agriculture Wendi Sun Rockland Trust Company March 25 th, 2015.
DETERMINANTS OF GROWTH IN THE BANKING INDUSTRY IN KENYA BY: WANGIRA FLERIA AND JUSTUS M. MUNYOKI,PHD Presented at the 10 th ORSEA Conference from 16 th.
DETERMINING FACTORS OF PRIVATE INVESTMENT; EMPIRICAL STUDY OF PAKISTAN
Key Policies Improving Business and Investment Climate Presenter: Governor CBBH: Kemal Kozarić, MA.
SMEs’ Finance and Participation in Global Markets Koji ITO Centre for Entrepreneurship, SMEs and Local Development (CFE) Organisation for Economic.
Openness, Economic Growth, and Human Development: Evidence from South Asian countries from Middlesex University Department of Economics and.
How to Enhance the Innovation Capability in New Member States? PhDr. Miroslava Kopicová National Training Fund European Innovating Minds,
Agglomeration Economies and Location Choices by Foreign Firms in Vietnam Dinh Thi Thanh Binh University of Trento, Italy.
Yohanes Kristiawan H This article presents empirical evidence on the determinants of the capital structure of non-financial firms in India based.
Financial Development and International Agricultural Trade D. Susanto and C. P. Rosson Department of Agricultural Economics, Texas A&M University College.
Agricultural Productivity and Economic Growth: Empirical Analysis on the Contemporary Developing Countries.
Bridging the ‘Digital Divide’: Information Technology & Growth in Small Developing States Robert Read & Didier Soopramanien.
Impacts of Climate Change on Corn and Soybean Yields in China Jintao Xu With Xiaoguang Chen and Shuai Chen June 2014.
Economic Growth SS7E7 The student will describe factors that influence economic growth and examine their presence or absence in Israel, Saudi Arabia, and.
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial growth Investment Policy for Attracting and Retaining.
THE DETERMINANTS OF QUALITY SIGNALLING USING STAR RATING IN THE HOTEL INDUSTRY OF CROATIA Zdravko Šergo Ana Težak Damijanić Institute of Agriculture and.
Performance of Intra-COMESA Trade Integration: A comparative Study with ASEAN’s Trade Integration Ebaidalla M. Ebaidalla and Abdelrahim. A. M. Yahia University.
BRICS and Knowledge-Intensive Business Services (KIBS): A Pressing Theoretical and Empirical Agenda Seminar presentation CEPAL 18 October 2012 Andrew Jones.
LOCATIONAL SPECIFIC ADVANTAGES OF ASIAN NEWLY INDUSTRIALIZED ECONOMIES FOREIGN DIRECT INVESTMENT IN THAILAND Santhiti Treetipbut.
Elusive Quest for Growth: Is innovation engine of growth? Motoo Kusakabe, Senior Counselor to the President EBRD.
M. Velucchi, A. Viviani, A. Zeli New York University and European University of Rome Università di Firenze ISTAT Roma, November 21, 2011 DETERMINANTS OF.
Dr. Tina Haisch, Economist, BAK Basel Economics GA 2008 Assembly of European Regions (AER) Open Space – International Speaker‘s Corner.
Second Congress of African Economists CESS Instittute Quebec, Canada
University quality, interregional brain drain and spatial inequality: the case of Italy Motivation and objectives This research aimed at analyzing and.
1 Are East Asian companies benefiting from Western board practices? John Nowland Discussed by Joseph P.H. Fan Centre of Economics & Finance Chinese University.
Infrastructure and Long Run Economic Growth David Canning Infrastructure and Growth: Theory, Empirical Evidence and policy Lessons Cape Town May.
Contribution of FDI inflows to the Efficiency of Investment Assaf Razin.
Primary agricultural commodity exports and unemployment African Economic Conference, October 28-30, 2013 JOHANNESBURG, SOUTH AFRICA. Alassane DRABO FERDI.
Income Benchmark Applied Inclusive Growth Analytics Course June 29, 2009 Leonardo Garrido.
The changing geography of banking – Ancona, Sept. 23 rd 2006 Discussion of: “Cross border M&As in the financial sector: is banking different from insurance?”
The bank-firm relationship after Basel II: a survey of italian firms Chiara Bentivogli, Emidio Cocozza, Antonella Foglia, Simonetta Iannotti Bank of Italy.
AID-GROWTH NEXUS: EMPIRICAL EVIDENCE FROM CARIBBEAN STATES Abiodun O. Folawewo.
Why Do Countries Use Capital Controls? Prepared by R. Barry Johnston and Natalia T. Tamirisa - December 1998 Presented by: Alyaa Ezzat.
Export Spillovers from FDI: Evidence from Polish firm-level data Andrzej Cieślik (University of Warsaw) Jan Hagemejer (National Bank of Poland)
1 Private Capital Flows to Africa: Opportunities, Risks and Way Forward Patrick N. Osakwe UN Economic Commission for Africa.
1 Investment Climate Constraints and Thailand Competitiveness Albert G. Zeufack, PhD. The World Bank Seminar on Sustainable Growth, Regional Balance and.
The Macrojournals Macro Trends Conference: New York 2015 Macroeconomic Determinants of Credit Growth in OECD Countries By Nayef Al-Shammari Assistant Professor.
Summary of Endogenous Growth Theories applied to ‘East Asian Miracles’
FOREIGN DIRECT INVESTMENT AND PRODUCTIVITY SPILLOVERS: Firm Level Evidence from Chilean industrial sector. Leopoldo LabordaDaniel Sotelsek University of.
International portfolio diversification benefits: Cross-country evidence from a local perspective By J. Driessen and L. Laeven Presented by Michal Kolář,
Macroeconomic situation. The economic downturn has been suspended Gross Domestic Product Seasonally adjusted data, 4th q of 2005 = Exports and Domestic.
13-14 Oct What is the Impact of WTO Accession? Evidence from the World David D. Li and Changqi Wu The Global Institute Conference The 2 nd Annual.
Human Capital, Industrial Growth and Resource Curse by Elena Suslova (NES’06) and Natalya Volchkova (CEFIR at NES)
Innovation and Productivity – Evidence from China Jingying Xu, Prof. Andreas Waldkirch Department of Economics ABSTRACT BACKGROUND STRATEGIES CONCLUSION.
Kehinde Oluseyi Olagunju Szent Istvan University, Godollo, Hungary. “African Globalities – Global Africans” 4 th Pecs African Studies Conference, University.
MONEY SUPPLY AND ECONOMIC GROWTH IN SRI LANKA (An Empirical Re - Examination of Monetarist Concept)
Competition Policy and Economic Growth: Evidence from Latin America Esteban Greco Diego Petrecolla Carlos A. Romero.
Dynamic capabilities in young entrepreneurial ventures: Evidence from Europe Aimilia Protogerou and Yannis Caloghirou Laboratory of Industrial and Energy.
Dnipropetrovsk Alfred Nobel University Master’s degree Diploma Project Topic: “Qualitative analysis and the enterprise development strategy formation”
Pantelis Pantelidis, University of Piraeus Dimitrios Kyrkilis, University of Macedonia Efthymios Nikolopoulos, University of Macedonia February 2011 The.
Linyue Li School of International Trade and Economics (SITE)
Mobile: Faculty Of Business FDI Inflows Spillover Effect Implications On The Asian-Pacific's Catching Up Process.
The Effects of Number of Industrial Enterprises, Value of Input, Value of Output, And Regional Minimum Wage on Labor Demand in Indonesia : An Empirical.
Productivity Growth and Convergence: Theory and Evidence
Influencing the Adoption of
At the 12th African Economic Conference, Addis Ababa-Ethiopia
University of Lagos, Nigeria 12/05/2017
The Impact of Human Capital Development on Competitiveness
The Determinants of FDI Inflows to Greece
Presentation transcript:

International E-Conference on Economy under sanctions 22 September 2013

Subject: Is Negligible Absorbed Foreign Investment, Effective on GRP Growth? Case Study: Iran Authors: Hasanali Aghajani Zahra Gholampoor Esmatosadat Taheri Fatemeh Yahyatabar Present By: Esmatosadat Taheri

1. Introduction The signals of world economic in 21 century are some related processes, in which one can point out to globalization, internationalization and over- nationalization. This processes affect not only on global markets functions, but also could lead to fundamental changes in competitive strategies of courtiers and nations, because hard condition and perennial variation of situation such as sanction compel them to use different markets for strategic plannings and achieving long term advantages(Permiakova,2008). The complexity and growing competition of today's markets are exist along with quick mutations of international environment and passing through industrial society to informative society as well as national economy's changes to global economy, this cause to mention capital absorption as a motivation motor or as a economic development 's Catalyzer, because this could lead to GRP Growth and development of countries, increasing productivity, making employment and social welfare and decreasing foreign pressures such as sanction(Gerifend, 2004).

Therefore Iran in order to achieve sustainable growth, requires investors' attendance in different sectors of economy. Capital shortage considered as one of the most important factors of underdeveloped countries. Thus foreign investment absorption in optimum combination with human resources and technology could motivate GRP Growth. So we studied, the relationship between GRP Growth and foreign investment growth in 8 selected provinces of Iran: Tehran, Bushehr, Esfahan, Markazi, Khuzestan, East Azarbayjan, ghazvin and Hormozghan; and then findings and results were expressed.

2. Literature review There is a widespread view that the impact of foreign direct investment (FDI) on economic growth is ambiguous (Gorg and Greenaway, 2004). Chao(2010) researched that FDI and agglomeration economies had positive impacts on GRP(Gross Regional Production) growth. Lastly it was stated that the domestic investment effect should be noticed specially, it had negative impact on FDI location and regional production. AmanSaini et al(2010), in their study by subject of FDI and economic growth used a threshold regression model and found new evidence that the positive impact of FDI on growth kicks in only after financial market development exceeds a threshold level. Until then, the benefit of FDI is non-existent. Musa Ahmed (2012), in a study by subject of Are the FDI inflow spillover effects on Malaysia's economic growth input driven? Implied that FDI effects on human capital, labor force, absorptive capacity and physical capital was significant and FDI played a significant role in achieving economic growth through input driven.

3. Conceptual Model Each conceptual model is beginning point and basis for doing study and researches, as it describes research variables and relationship between them (Edwards et al, 2000). In this research, two variables are considered. One GRP Growth that is regarded as a growth amount of gross domestic production, and the other one is foreign investment growth, so the used pattern for study the casual relationship between GRP Growth and foreign investment growth and vice versa in selected provinces of Iran is in the form of below, which in it lags number would be chosen by Hsiao causality test: Which, and respectively are investment growth (provinces) and GRP Growth (provinces).

4. Data Data were extracted through Iran central statistics, investment organization and time series of central bank of Iran in the years of The ratios of foreign investment volume to gross domestic product in each province were in table 2. As we see, mentioned ratios are negligible in comparison with global data in the same period. Here, maximum rate is %0.45 which in comparison with international statistics that averagely were %1 in south East Asian countries is negligible and also is lower than 1/5 of Middle East and North of Africa countries that Iran is among them.

Table 1.provinces FDI Growth and GRP Growth

Table 2.provinces Ratios of foreign investment volume to gross domestic ( ) (Note: 0.00% implies that the ratio was smaller than 0.001%)

Table 3. Global Average of Ratios of foreign investment volume to gross domestic due Source: World Bank Data (2012)

5. Methodology The aim of this issue was to examine the casual relationship between GRP Growth and foreign investment growth in 8 provinces. To do so, we used central statistic institutions and central bank of Iran. The foreign investment data obtain from statistics of investment organization. The used data for each province were during the year of For estimating the causal relationship of GRP Growth to foreign investment growth in Iran provinces, Granger Hsiao causality test were applied. At first step, a collection of autoregressive regression on dependent variable is estimated. In first regression equation, dependent variable would have one lag, and in the next regressions, one lag would be added. For this, below formula was used:

In this function T is sample size, m and SSE are lag length and summed squared Error. Then for each equation, FPE: Final Prediction Error; would be calculated in the form of below and each equation has the minimum value of FPE, also lag length is optimized and shows better pattern. In the second step, for determination of next variables optimized lag's number, by considering the number of optimized lag in first step, the regression relationship in below was estimated. shows the number of optimized lags:

Table 4.SSE of estimation with different lag Then FPI criteria for each regression were calculated in the form of below:

Table 5. FPE of estimation with different lag

The variable's optimized lag length, E, is a lag length that make minimum Final Prediction Error, therefore the value of optimized lag for estimating the causal relationship of foreign investment growth to economy growth in Iran's 8 province was become 5.lag length is optimized and shows the better pattern. In this situation, in order to use Granger causality test, this Comparison was done: If, then E is not the cause of G. And if the relationship was vice versa, then E is the cause of G. The necessary condition for doing this test is that, all of the variables should be static. If they weren't then they should be differentiated to become static. Then this static differentiation is used in test.

6. Results and Findings By time passing and improvement of different theories and patterns related to GRP Growth, new variables are introduced as a growth motivator, and so attract economist's view. In this relevance, the role and place of capital and investment that allocates to themselves in growth and development patterns, is being revised and investigated continuously, because investment and its flows are become more and more complicated and diversified. In this study, we try to examine the foreign investment impacts on GRP Growth and vice versa in Iran s provinces on the base of theoretical and empirical analysis. The most important of the study's results indicate that the impact of foreign investment entering on GRP Growth is being reinforced. And also the effect of GRP Growth on foreign investment is very tangible.

In other word, these two factors have causal mutual relationship in total country and its provinces. So to reach to the continuous and high GRP Growth, foreign investment absorption should be considered more important than before as a way of financing, technology transmission, increasing employment and so on under different conditions such as sanctions and other pressures. So necessary policies should be applied to absorb investment to whatever is possible. In addition by considering the mutual relationship between GRP Growth and foreign investment growth in provinces, it is suggested that: authorities of provinces should recognize the investment opportunities in their province skillfully and provide necessary condition to absorbed more foreign investment as soon as possible, that would be lead to continuity and increase in GRP Growth of provinces and in country's economy growth as a consequence of that. Findings showed that spite of negligible absorbed foreign investment in studied provinces, bilateral relationship between GRP Growth and foreign investment were perceivable.

Thanks for your attention