An Examinination on Factors Determining Value-Added in Iran's Industry and mine Sector in Term of Johansen's Cointegration Model

The paper aims to model Factors Determining Value-Added in Iran's Industry and mine sector. In doing so, we have drawn on a VECM approach to estimate long-run coefficients, using the data spanning 1977 to 2014. To collect data, Central Bank's statistics, economic indices, and data obtained from Statistical Centre of Iran have been utilized. The manufacturing sector has a key role in the process of developing countries. Because of relative importance of technical knowledge in this sector, production as well as the forward and backward linkages with other sectors of the economy is considered by experts and economic policymakers.
The findings show that potential growth in manufacturing sector in Iran has experienced a declining trend since 2001.in sum, factors such as The decreased investment in Industry and mine sector, inappropriate policy on exchange rate, economic sanctions, and lake of motivations to invest in manufacturing sector, and the lake of access to modern foreign capital machinery and equipments have played a dominant role in declining economic growth in Iranian manufacturing sector.