The Determinants of Foreign Direct Investment in Iran: Bounds Testing Approach

Economic Research - Ekonomska Istrazivanja Vol. 25(3) (2012)

20 Pages Posted: 26 Feb 2015

See all articles by Mohammad Reza Mohammadvandnahidi

Mohammad Reza Mohammadvandnahidi

Islamic Azad University (IAU) - Tabriz Branch

Nasim Jaberi

Islamic Azad University (IAU) - Tabriz Branch

Davoud Norouzi

Islamic Azad University (IAU) - Tabriz Branch

Date Written: September 3, 2012

Abstract

Foreign direct investment (FDI) is counted to be an important variable to increase capital for domestic investors and improvement of capital formation in host country so almost all countries want to attract FDI. This paper attempted to investigate the impact of openness, exchange rate and infrastructures on FDI in Iran using the bounds testing (ARDL) approach to co integration. The data span is from 1975 to 2007. The results indicated that when FDI is the dependent variable there is co integration. We found all variables have positive and significant impact on Iran’s FDI in long-run and short-run, except openness that has no impact on FDI in short-run.

Keywords: ARDL bounds test, foreign direct investment, Error correction model, Iran

JEL Classification: C32, F21

Suggested Citation

Mohammadvandnahidi, Mohammad Reza and Jaberikhosroshahi, Nasim and Norouzi, Davoud, The Determinants of Foreign Direct Investment in Iran: Bounds Testing Approach (September 3, 2012). Economic Research - Ekonomska Istrazivanja Vol. 25(3) (2012), Available at SSRN: https://ssrn.com/abstract=2569545

Mohammad Reza Mohammadvandnahidi

Islamic Azad University (IAU) - Tabriz Branch ( email )

Tabriz Northern Bypass Expy
Tabriz, East Azerbaijan
Iran

Nasim Jaberikhosroshahi (Contact Author)

Islamic Azad University (IAU) - Tabriz Branch ( email )

Tabriz Northern Bypass Expy
Tabriz, East Azerbaijan
Iran

Davoud Norouzi

Islamic Azad University (IAU) - Tabriz Branch ( email )

Tabriz Northern Bypass Expy
Tabriz, East Azerbaijan
Iran

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