The Effect of Foreign Direct Investment and Personal Remittances on the Human Development Index in Iran

One of the main ways to finance economic plans and projects and benefit from advanced knowledge and technology is to use foreign capital flows. According to many researchers, foreign capital flows can have effects such as improving household incomes, meeting foreign exchange needs, increasing job opportunities and improving human capital for the host country. Therefore, it is necessary to study the effect of different types of foreign capital flows on the macroeconomic indicators of the host country. Foreign direct investment and personal remittances are the biggest and most important of these foreign capital flows. As these currents increase, different effects of them appear on the host country. Among them, we can mention the effects of foreign direct investment and personal remittances on the human development index. Despite the importance of this issue, internal studies have paid less attention to it. The purpose of this study is to investigate the effect of foreign direct investment and personal remittances on the human development index in Iran. In this study time series data from 1991 to 2018 with the autoregressive distributed lag ARDL method and microfit 5.5 software are used. The results show that foreign direct investment has a positive and significant effect on the human development index in Iran. The results also indicate that remittances have a negative and significant effect on the human development index in Iran.