Analyzing The Effects of the Macroeconomics Determinants in Managing the Petrochemical Industry’s Investment Risk

The basic question of this study is how and how much controlling the macroeconomic factors can be effective in managing the risk of petrochemical industry investments. To respond, the impacts of the most important economic factors, affecting the active petrochemical industry in the Tehran stock market (as one of the most important Informational databases in the case of Iranian economy), are examined with considering the revealed facts and evidences of the country's economy, feasibility of study, operational capability, quantitative analysis, literature review, and published official statistics. In this way, it has been attempted to identify the most important macroeconomic variables affecting the investment risk in the petrochemical industry. In this regard, a new statistical method, based on the long-term memory approach (a nonlinear long-term memory conditional heteroscedasticity (FIGARCH)), has been applied. For this purpose, the optimal patterns were estimated by using the monthly time series data during the period from November 2008 to October 2018. The results of the study, in addition to confirm the existence of a significant relationship based on economic-financial theories between economic factors and investment risk in the petrochemical industry, emphasize on the more critical role of both the exchange and inflation rates variables in comparison with other variables of the research in order to managing investment risks in the petrochemical industry. Furthermore, the effects of oil price and the openness degree of the economy are the other significant macroeconomic variables in determining the risk behavior of investing in this industry.