Investigating the Impact of Economic Sanctions and Exchange Rate Uncertainty on FDI Absorption in Iran: A Fuzzy Approach

Today, foreign direct investment is an important factor in creating broad economic changes for all countries, especially developing countries. Therefore, considering the importance of attracting foreign investment in the Iranian economy, the present study has examined the effect of economic sanctions and exchange rate uncertainty on FDI absorption in Iran using fuzzy regression model during the period 1990-2018. The results showed that high-intensity sanctions, which were mostly economic and comprehensive sanctions (such as the Central Bank and Iran oil sales sanctions), had a much deeper impact on capital inflows than low-intensity sanctions. Have had. It was also shown that the main obstacle to attracting foreign direct investment in Iran is the severe sanctions, which, like a high wall, overshadow other factors and have greatly reduced the incentives for foreign direct investment in Iran. Also, according to other findings, exchange rate uncertainty has a negative effect on attracting foreign direct investment in Iran. This finding confirms that the widespread exchange rate uncertainty in the Iranian economy has created an environment of uncertainty for investors to make decisions. Because it is difficult to predict profitability in the commercial and non-commercial sectors, as well as the cost of new capital goods.