Presenting a model of the Impact of Economic Variables on the Total Productivity Index in Iran

Productivity means maximizing scientifically the use of resources, manpower, facilities, and the like, reducing production costs, expanding markets, increasing employment and striving to increase real wages and living standards as they benefit workers, management, and society. Due to limited resources and unlimited needs, improving productivity, along with population growth and fierce competition in the global economy, is not a choice but an inevitable necessity. The present study set out to investigate the effect of economic variables on the total productivity index in Iran over the period of 1999 to 2017, employing the Autoregressive Distributed Lag (ARDL) method. The findings indicated the significant positive effect of Qarz al-Hasna facility balance, exchange contract facility balance and partnership contracts facility balance as the components of Islamic banking facilities on the Total Productivity Index. Accordingly, it can be concluded that Islamic banking facilities have a positive effect on the Total Productivity Index in Iran, both in the short and long term. In the short and long term, real GDP (economic growth) was found to have a positive effect on the Total Productivity Index. The effect of inflation and the official exchange rate on the total Productivity Index was negative and statistically significant in the short run, after one year, and in the long run.