The Effect of Foreign Direct Investment on Institutional gap between Iran and Selected Countries

In recent decades, the flow of foreign direct investment has been more visible in the global economy, and its impact on other factors including the institution is considered. The aim of this study is investigating the effects of foreign direct investment on institutional gaps between Iran and selected countries during the period 2001-2017. For this purpose, panel data method and generalized least squares approach have been used for selected countries. The results of the study show that foreign direct investment has a significant and negative effect on the institutional gap. The population variable in the host country (Iran) has a significant and negative effect on the institutional gap, but in the selected countries has a non-significant and positive effect on the institutional gap. The economic growth in the host country (Iran) has a negative and non-significant effect and in selected countries it has a positive and significant effect on the institutional gap. The geographical distance has a significant and positive effect on the institutional gap between Iran and selected countries.