The impact of the Components of Business Environment on Private Sector Investment: the Case of Selected Developing Countries

Since the business environment has an undeniable role in increasing investment incentives and creation of productive economic activities, this paper examines the impact of some of the components of the business climate index (the number of tax payments, the overall tax rate, the number of documents required for export, the time required for export, import and the number of documents required for imports) on private-sector investment in seven selected developing countries (includes Iran) during the period 2006 to 2013. The estimation results of the panel Cointegration method with Dynamic Ordinary Least Squares (DOLS) technique shows that whereas, all business climate variables, and the real interest rate have significant negative impacts on private investment, the impact of economic growth is positive.