Iranian Economic Review
Volume:21 Issue: 48, Summer 2017

Nowadays, conservation, maintenance and monitoring of natural resources according to estimated benefits and costs, plays an important role in economic growth and sustainable development. Economic development along with environmental protection, while preserving economic competitiveness by providing eco-friendly technologies, will prevent of loss and waste of environmental resources. One of the most comprehensive and complete environmental indicators which today used to provide a clear and comprehensive picture of environment in each country is Environmental Performance Index (EPI). Therefore, the main purpose of this study is investigation of affecting factors on environmental performance index in selected OPEC countries during the period 2000-2012 by using panel data approach. The results show that governance index, internet users and natural resource abundance index variables have positive and significant effect and openness and the carbon dioxide emissions per GDP have negative and significant effect on environmental performance index in selected OPEC countries. Also the coefficient of human development index (HDI) is positive and insignificant and value added of industry sector is negative and insignificant.

This article is an empirical attempt to explore the relationship between sanctions (financial and non-financial), oil price shocks and Iran-Russian bilateral trade flows over the period 1991–2014. In contrast to earlier studies in which a gravity model has been estimated through a panel data approach, in this paper the authors apply a gravity model for only two countries and do the estimations using the vector error correction approach. The overall estimation results indicate that financial sanctions, non-financial sanctions and oil price shocks negatively impact the Iran-Russian trade. Furthermore, financial sanctions had the greatest negative impact on Iran-Russian trade rather than non-financial sanctions and sharp oil price shocks.

One of the main criticisms of location models is simplistic assumptions concerning the consumers’ distribution on the street or city. The location models usually make use of uniform distribution of consumers while it is not true in reality, and mostly the consumers’ accumulation is more in the city centers rather than suburb areas. This study deals with selection of optimal location of firms using Lijesen and Reggiani (2013) spoke model and changing the consumers’ distribution from uniform to triangular in a two-step game. In this game, the firms select their location, at the first stage, and enter the price competition at the second stage. Results indicate that the increased number of streets and transportation costs leads to price increase and this indicates that the farther away are the firms from each other, their competition in the market would decrease and the price would increase. If both firms are located in the same distance from city center, they would gain the same market share and more inclined toward being closer to city center or having minimum distance. Moreover, when in the consistency issue include the triangular distribution, Nash equilibrium price is less compared with Rohlfs model (1971) and a greater range of consumers purchase the product.

In this paper, the behavior of the real oil price and OPEC and non-OPEC oil production during 1973-2013 are modelled. Interactions among OPEC, non-OPEC oil production, global oil consumption, and the real price of crude oil are estimated using a Structural VAR model (SVAR). After providing evidence for the structural breaks in oil price in 1996, the results indicate that, according to variance decomposition analysis, during the two periods of 1996-1973 and 2013-1997, OPEC oil production responded significantly to positive shocks of global oil consumption and non-OPEC oil production responded significantly to shocks of OPEC oil production. During the OPEC era (1973-1996), real oil price responded significantly to positive shocks of OPEC oil production and during the new industrial age (1997-2013) responded significantly to positive shocks of global oil consumption. According to historical decomposition, the cumulative effects of structural shocks of non-OPEC oil production and price on OPEC oil production are greater than the cumulative effects of structural shocks of OPEC oil production and real oil price on non-OPEC oil production .Also, cumulative effects of structural shocks of OPEC oil production on real oil price are greater than cumulative effect of structural shocks of non-OPEC oil production on real oil price.

This paper attempted to examine the effects of foreign trade, energy consumption, human capital and physical capital on GDP in 8 candidate developing countries and 8 candidate developed countries during 2002-2014.In this study, the effects of variables were estimated through panel cointegration technique and dynamic ordinary least squares (DOLS).The results of regression test indicated that all variables had significantly positive effects on the production process. Further details about the results were obtained by evaluating foreign trade in general (exports and imports combined), in addition to separately evaluating export and import, where there were significantly positive correlations evident over the period. In the candidate developed countries, the role of exports was more prominent than imports and total trade. In the candidate developing countries, the role of imports was more prominent than exports and total trade.

This paper is to convince the usage of the nonlinear unit root tests when dealing with a nonlinear model. To do so, the stationary test for variables in a model titles “Fiscal Reaction Function in Iran” has been applied according to both the ordinary and the Nonlinear Dickey-Fuller (NDF) tests. Results show that while variables under investigation are stationary in a nonlinear form, augmented Dickey-Fuller test indicates tendency to fail and reject the null hypothesis of a unit root in the presence of nonlinear dynamics. Therefore based on the results of Nonlinear Dickey-Fuller (NDF), the paper estimates the fiscal reaction function (FRF) in Iran. The estimated nonlinear regression supports a threshold behavior of two regimes in applying the fiscal reaction. Finally, findings confirm that fiscal policy in Iran is countercyclical though not sensitive in order to react to accumulation of the government debt.

This research has aimed to examine the feedback effects between economic growth and environmental degradation through health that is one of human capital elements and also the consequences of such these relationships on economic convergence process during the period 1990-2013 for 60 developing countries in framework of simultaneous equations model by using unbalanced panel data analysis. This requires analyzing the interrelationships between economic growth, health, and environmental degradation. The results show the positive direct feedback effects between economic growth and health status, also positive indirect and reverse direct feedback effects between economic growth and environmental degradation. Although economic growth increases environmental degradation, sustaining the convergence process of developing countries and reaching the environmental Kuznets curve to turning point of CO2 emission represent stronger indirect feedback effects between economic growth and environmental degradation than direct feedback effects.

FDI can create employment and reduce poverty, increase the host country’s export capacity causing the developing country to increase its foreign exchange earnings. The aim of this study is to investigate whether FDI affect economic growth in GCC countries over the period 1980-2014 using ARDL approaches. The empirical results show that the FDI is one of the major drivers of economic growth in Iran and GCC countries. The result of bound test indicates that there is a long-run steady-state relationship between FDI and GDP in Iran and for individual country of GCC (Gulf Cooperation Council). Also results of Granger-causality test imply that a bidirectional causalities from FDI to real GDP growth in Qatar, Saudi Arabia and UAE; unidirectional causalities from FDI to real GDP growth rate in Iran and Bahrain and no causality between FDI and real GDP growth rate in Kuwait and Oman.

Tire cent decades, the internationalization of trade and companie's engagement in the global market has been found with a double significance. Planning and investment to increase the share of non-oil exports in total exports and reform its combination to export of goods and services with higher technology are of approaches of vision plan that export of Construction Services is of its characteristics. Construction Services which are one of the major fundamentals in economic development of countries encompass a series of methods and tools that provide the possibility to supply goods and services within community by optimal use of resources and manufacturing agents including capital, raw materials and manpower. This study has aimed to rank export target market of Construction Services. For this, by applying Walvoord's target market selection model, the indicator affecting market selection using questionnaire have been determined, that 14 indicators have been selected, and weight of indicators have been calculated by incremental power method, and then the countries which have imported Construction Services from Iran in recent seven years have been prioritized by resolving linear assignment problem using software Gomez, of which Lebanon, Iraq, Azerbaijan, Belarus, Tajikistan and Kazakhstan have been recognized as the superior countries.

This study aimed to examine the Islamic stock market integration between Indonesia and Malaysia, and the effect of foreign interest rates on both stock markets. This study used the monthly time series of Jakarta Islamic Index, Hijrah Syariah Index, and foreign interest rates within a period from August 2000 to January 2016. Result of cointegration test demonstrates that while there is a cointegration between Jakarta Islamic Index and Hijrah Shariah Index, no cointegration occurred between Jakarta Islamic Index, Hijrah Shariah Index, and foreign interest rates. Estimation result of the VAR model indicates that there is a long-run relationship between Jakarta Islamic Index and Hijrah Shariah Index, and that there is integration between Indonesian and Malaysian Islamic stock markets. Furthermore, estimation result of the VARX model reveals that foreign interest rates only affected Malaysian Islamic stock price index.

Natural resources as a source of wealth can increase prosperity or impede economic growth. Empirical studies with different specifications and data are also mixed on whether natural resources are curse or blessing. In fact, the variety of model specifications, measurements, and samples in the empirical literature makes it difficult to generalize the results. In this study, a growth model including natural resources is developed to estimate the effect of natural resource dependency on economic growth, using different measures of natural resources and controlling for the quality of institutions in 149 countries during 1996-2010. The results show that natural resource abundance, proxied by per capita natural wealth, has a positive and significant effect on GDP growth. However, the impact of natural resource dependency on GDP growth depends on the type of natural resources and the quality of institutions. Fuel dependency, for example, can be considered a strong curse, as it has no effect on GDP growth, and agriculture and food dependency a weak curse, as it can increase GDP growth in the presence of good institutional qualities. Results also show that among different indexes used for institutional qualities, government effectiveness, regulatory quality, and rule of law are more effective in avoiding the negative effect of resource dependency. The thresholds above which different types of institutional qualities can turn a curse to a blessing are also estimated for different types of natural resource dependency.

This paper contributes to the existing literature by examining the determinants of health financing in 177 developed and developing countries. The study introduces the variables of government effectiveness and control of corruption to capture the impact of governance quality on different mechanisms of health financing. Utilisng panel data analysis, namely system-GMM estimators, to obtain unbiased estimates, the results indicate that public and private health financing do not follow the same pattern. In addition, the GDP per capita and total government expenditure is crucial factors that affect health financing in both developed and developing countries. External aid tends to reduce public health financing, especially when it is received by a country with low governance quality. Interestingly, a high level of government effectiveness and control of corruption are found to be very influential in stimulating public health financing and helping to reduce private health financing in developed countries. However, the low amounts of health financing in developing countries are attributable to the low quality of governance, which increases out-of-pocket health financing.