Estimation of Private Sector Investment Function in Iran according to the Islamic Economics Approach

Forming capital or investment is important to maintain economic growth. Recognizing the factors affecting the investment helps its growth for this reason. Islam has also paid a lot of attention to this issue and with regard to this issue, economists with a focus on Islamic economics have been looking for the extent and how Islamic economics issues affect the amount of investment, especially in Islamic countries. This issue can be studied in Iran as an Islamic country. This study examines the investment function of Iran's private sector with the approach of Islamic economics during the period 1336-1396 for using unbound error correction model. The findings of the study show that with a one percent increase in non-oil GDP, private sector investment expenditures increase by 0.96% and with a one percent increase in the ratio of Qard-al Hassan saving accounts to all long run investment accounts , private sector investment expenditures increase by 0.45. With increase in the ratio of Qard-al Hassan accounts to long run investment accounts, the power of banks for finance will increase, as a result, investment will increase.