Investigating the Effects of Banks Participatory Facilities on the Real Sector of the Economy with the Emphasis on Financial Crises

This paper examines the effects of banks' equity facilities on the real sector of the economy with emphasis on financial crises using the threshold approach (STAR) based on the annual data of the Iranian economy during the period 1986-2019. The results of estimating the nonlinear part of the model show that there is a positive relationship between investment variables, bank savings volume, liquidity volume and crude oil income on investment, production and employment in the model. Also, the variables of real interest rate, exchange rate and financial crises have a negative relationship with investment, production and employment in the Iranian economy. In other words, it can be argued that the nature of production and investment in the Iranian economy is oil, and the booms and busts in the Iranian economy go hand in hand with the booms and busts of oil revenues. Increasing oil revenues will increase the country's monetary base and the volume of liquidity will increase, and naturally inflation will also increase. Expectations and uncertainty from inflation in the coming period also contribute to the sharpening of inflation, and as uncertainty increases, the volume of facilities granted by banks in the form of partnership contracts decreases, leading to money leaving the banking system and entering speculative markets. Investment in the manufacturing sector will decrease and the production and employment situation in the country will be worsened.