Investigating the Short-Term and Long-Term Effects of Political Risk and Financial Development on FDI in Iran

Considering the increasing importance of foreign investment and the competition that has been created between countries to attract more of it؛ the study of short-term and long-term effects of financial development and political risk factors on foreign direct investment flows in Iran are significant. Therefore, the present study examines the short-term and long-term effects of political risk factors and financial development on foreign direct investment in Iran. In order to evaluate the impact of the variables used in the study, Time series from time series 1346 to 1395 have been used for political, Population, exchange rate, inflation rate, GDP, degree of trade openness and direct foreign investment in Iran. The results of this research have shown that political risk in the short and long term does not have a significant effect on foreign direct investment, however, all components of population financial development, exchange rate, inflation rate, GDP, The degree of trade openness in the short and long term has a significant impact on the flow of foreign investment.