Iranian Economic Review
Volume:23 Issue: 57, Autumn 2019

In the modern competitive world, Research and Development (R&D) and its overflowing technologies are the main basis of innovation, which in turn, can be determined as an important source of economic growth. Investing in research activities can help firms with different technological levels, especially high-tech industries to improve their productivity. This paper aims to analyze the role of R&D expenditures in total factor productivity (TFP) growth in Iran’s industry sector. For this purpose, data from industries with different levels of technology (high, medium and low) over the period 1994-2010 is used. Results show that R&D expenditures in high-tech and then in medium/high-tech industries have the most positive and significant effect on TFP growth. In addition, among high-tech industries, R&D expenditures have the greatest impact on the productivity growth in drug and chemical industries related to medicine (Code 2423) which has experienced significant progress in recent years.

The business environment is characterized by environmental and exogenous factors that affect company performance to the extent that it prevents managers from interacting effectively with a company. This study built on the literature on the ease of doing business and capital flight by empirically demonstrating the importance of business environments across different countries. To this end, an econometric model was estimated by using a dynamic panel data model on selected East Asian countries during the period of 2004 to 2015. We found that the ease of doing business exerts negative and significant effects on capital flight. Our estimates suggested that an increase in ease of doing business leads to an average decrease of 0.09% in capital flight in all the examined countries.

Corporate governance structures in the wake of observed differences in firm ownership structures in developed markets and emerging market economies are distinct. In this paper, we examine the effect of an ownership structure of firms on the market reaction to corporate news flows in the context of emerging market economies like India. We observe the price and volume movements associated with eight different categories of corporate news flow (Analyst Calls, Earnings, Earnings forecasts, Finance, Legal and Regulatory, Management, Operations and Restructuring ) for a sample of firms listed on the National Stock Exchange of India after taking into consideration the extent of promoter ownership in the firm using the standard event study methodology. The magnitude of the price and volume reaction reveals that the market reaction to firm specific corporate news differs according to the type and sentiment of the news flow and the level of promoter ownership in the firm. We also provide a perspective on the relative importance of corporate news flow to the investors for firms with a distinct ownership structure.

Energy is one of the main and essential factors in economic growth. Electricity as one of the most important resources of energy supply for economic sectors on one hand, and as an index of welfare, on the other hand, is one of the economic development benchmarks. The growth of GDP will increase the demand for energy resources, including electricity. Hence, policymakers should pay attention to secure electricity supply in their economic planning process. In this study, due to the different structure of each economic sector and the impact of geographical and climate conditions, the electricity demand function in different economic sectors (industry, agriculture, and services) between 31 Iranian provinces during the period of 2010-2014 is estimated in which different panel data method was employed. The results of this study show that the value-added (income) elasticity of electricity demand in all economic sectors is significant, positive and smaller than unity. The elasticities estimated for the industry, agriculture, and service sectors are 0.39, 0.6 and 0.53, respectively. Also, the own price elasticity of electricity demand for industry and service sectors is significant and smaller than unity and is not significant for the agricultural sector. Additionally, the results indicate that the value-added of the Iranian economic sectors has a positive and significant effect on the electricity demand of each sector.

The environmental issues have received a lot of attention in recent years. Since environmental pollution is one of the issues that may damage the ability of future generations, it is important to examine the determinants of the environment quality. The main objective of this study is to investigate the impact of urban and rural income inequality on natural gas consumption in Iran. To this end, Iranian provincial panel data is used for the period 2006-2015. The income inequality variable is measured with Theil index and Gini coefficient. To estimate the mode the l, Generalized Method of Moments (GMM) system is used. The results indicate a significant negative impact of urban and rural income gap on per capita consumption of natural gas as a benchmark for environmental performance. Furthermore, the current research findings show that the impact of rural and urban income inequality on natural gas consumption depends on income level. There is also a positive and significant relationship between urban level and per capita consumption of natural gas. The findings confirm that there exists an inverted U-shaped relationship between per capita GDP and natural gas consumption.

his paper investigates the conformity of market participants’ decisions with the Islamic codes of conduct from the economic and philosophical perspectives. At the outset, the contributions of the renowned contemporary Muslim philosophers on the epistemological issues between the “is” and the “ought” are presented. Subsequently, a synthesized construct that would resolve the dichotomy between the normative and positive economy is outlined. The approach and the conclusions of this paper are expected to alleviate the dissatisfaction expressed by many Muslim economists for the sole application of the normative or positive economic methodology in the field. Furthermore, the paper validates arriving at conclusions in line with Islamic ethical norms by an empirical study of the actual economic behavior of market participants. The conclusions of this paper are not limited to economics but are expected to be applicable to all Islamic social sciences where similar issues are disputed.

Optimal resource allocation by means of the price mechanism is one of the main duties of the economics. Optimum allocation is sometimes realized not through the price mechanism, but via assignment algorithms due to an insufficient number of agents on either side of the exchange. Facing the same problem, the kidney market may be considered as a type of market failure that calls for market design. Indeed, such design is regarded as a solution to the problem. Although the current model of organ transplants for non-relative living donors in Iran brings patients certain benefits, it suffers from serious weaknesses that require revisions. The present study aims to analyze the kidney market using a matching theory which is a subset of market design. Then a model is developed in a test market for the research sample in Hamadan Province in 2015. Eventually, recommendations are made to modify the Iranian model of kidney donation. Despite Roth’s model, the proposed model is based on two-sided matching. In this regard, information on 40 kidney suppliers and demanders were recorded in a clearinghouse. Subsequently, agents’ preferences on either side of the market (i.e. patients and donors) were ranked based on blood-type, tissue, duration of disease, age, and gender compatibility. Applying the proposed model to the research sample, the results showed that 19 out of 20 pairs gained access to stable allocations.

This empirical analysis endeavors to trace out the causal nexus between core inflation and economic growth from the perspective of twenty worlds’ leading economy with the help of the nonlinear Granger causality approach by using time series data from 1981 to 2016. Based on nonlinear Granger causality results, it has been found that there is unidirectional casualty running from core inflation to economic growth in Belgium, Denmark, Franc, Greece, India, Norway, and Portugal as well as Sweden. In these countries, core inflation is causing economic growth. As per as Australia, Canada, Germany, Greece, Japan, New Zealand, Portugal, Sweden, Switzerland, and the United Kingdom is concerned the outcome of causality analysis documents that there is unidirectional causality running from economic growth towards the core inflation. Finally, the analysis also manifests that there is no causality running from core inflation towards the economic growth and vice-versa in Ireland, Israel, Netherlands, and Spain.

he links among trade, technological changes, and worker earnings have been the subject of intense research during the past few decades. The current literature on this subject shows that trade liberalization and technological changes are the main drivers of demand for skilled workers and a rise in the wage premium. In the present article, a panel of 134 Iranian manufacturing industries over the period 2004-2013 and System GMM estimator was used to examine the effect of export(as a proxy for trade) and technological changes on relative wages in high-tech and non-high-tech industries. Our findings show that the estimates are affected by a strong path-dependency in relative wages of both subgroups. Moreover, the education, capital-labor ratio, and total factor productivity (TFP) have a positive and significant impact on relative wages in both groups of the industries. Nevertheless, these variables are more effective in high-tech industries rather than non-high-tech ones. Finally, firms’ decision for entering into international markets puts a positive effect on labors’ earning. While to increase the market share, firms have to cover the trade costs by adjusting the cost of production factors such as labor force or capital.

The purpose of the present study was to investigate the effect of the travel distance of tourists on the demand for domestic tourism in Mashhad. Data used in this research was cross-sectional which includes 1388 domestic tourist families who stayed for at least one night in Mashhad City in 2005. The sample was selected using a randomized stratified sampling method and the data was gathered by an oral interview with the heads of the tourists' households and by completing the questionnaire. Using the AIDS model, income and price elasticities were calculated for six items including food, accommodation, transportation, having fun, shopping and souvenirs, and the impact of travel distance on the demand for tourist goods in Mashhad was investigated.

Basically, many developed and developing countries need to expand tourism activities for accessing to the goals of national economic development and attracting foreign funds, therefore evaluating the efficiency of tourism industry can have significant help in recognizing the existed tourism potentials. The Chabahar zone in spite of numerous potential abilities in attracting domestic and foreign tourists and despite the fact that it is known as one of the important poles of tourism in Iran, but it is not so successful in attracting tourists. The present research has been provided to access the efficiency of the tourism industry in this area. For analyzing the information, the Data Envelopment Analysis Method (DEA) have been used. According to the results, the technical, management and scale efficiencies are 0.58, 0.69 and 0.84 percent respectively. It is suggested to strengthen the marketing, advertising and doing appropriate transportation infrastructure by employing manpower and efficient and expert management.

his study attempts to examine the empirical relationship between gasoline taxes (as the most effective energy carrier of emissions) and labor productivities in the case of Iran using the time series data for the period 1990-2015  usingthe autoregressive distributed lag (ARDL) approach. This research tests the interrelationship between the variables using the bounds testing to cointegration procedure. First, we estimated gasoline demand function by ARDL method and thereafter we subordinated the estimated gasoline demand as regressors in the per capita of labor productivity function. According to price variation in the gasoline demand, we calculated the effect of the green tax on labor productivity over three scenarios. The results imply green tax over three scenarios even though Porter Hypothesis has a negative impact on the labor productivity. Estimating the Error Correction model reveals that the speed of adjustment to restore equilibrium is a stable long-run relationship.

T he world economy has experienced a bulk of positive and negative shocks in crude oil prices and exchange rates over the years, and that global inflation has undergone some changes. Such shocks have affected the macroeconomic variables in the countries of the world and have challenged the economies of these countries, and have led them to take different measures to protect themselves against the devastative effects of these shocks. Accordingly, the main objective of the current study was to analyze the dynamic effects of three external shocks (global oil price shock, euro / dollar exchange rate shock and global inflation shock) as well as to investigate the appropriate monetary policy strategy for the Iranian economy, given the structural characteristics and patterns of external shocks. In so doing, we analyzed the responses of external responses to external shocks according to alternative monetary rules, including Headline Inflation Targeting (IT), Core Inflation Targeting (CIT), and Exchange Rate (ER) rule. Therefore, in this research, the goal was to determine the monetary policy rule to minimize both macroeconomic fluctuations and keep inflation at a low level. Furthermore, we strived to answer the question that whether the inflation criterion in Iran should be headline inflation, core inflation or exchange rate. To answer this question, using the DYNARE software, we estimated a multiplicative New Keynesian Dynamic Stochastic General Equilibrium model based on the characteristics of Iranian economy. Our primary finding showed that core inflation rule was the best monetary rule for stabilizing both macroeconomics and inflation.