The Impact of Investment Shocks on the Output of Iranian Manufacturing Industries

In this study, we have tried to estimate the impact of investment shocks on output in manufacturing industries of Iran. In this research, Vector Autoregressive (VAR) model is applied for the period starting from 1374 to 1393. To achieve more reliable and comparable results, we have categorized industries into three groups, namely resource base, low technology, medium and high technology. Using Impulse Response Functions and Variance Decomposition Analysis, the results show that investment shocks have a significant impact on all three sample industrial groups. In other words, capital increase grows value added of Iranian industries in both short-run and long-run.