Iranian Economic Review
Volume:22 Issue: 52, Summer 2018

The relationship between research productivity and economic growth is the subject of information science which deals in this study to examine the impact of number of publications, research & development (R&D) expenditures and researchers involved in R&D activities on economic growth in the World’s largest regions for the period of 1980–2011. The study further expanded the research-growth nexus in the context of top twenty nations in terms of research output for the field of science and social sciences. The results confirmed the long-run relationship between research output and economic growth; while there is bidirectional causality between real economic growth and number of publication, in United States, Italy, Spain, Australia, India, Netherlands, Brazil, Switzerland, Taiwan, and Poland. Similarly, there is two-way causal relationship between real economic growth and R&D expenditures in USA, China, UK, Japan, India, Switzerland, Taiwan, Sweden, and Turkey. Finally, there is evident of feedback hypothesis between real economic growth and researchers involved in R&D activities in the USA, UK, Japan, South Korea, and Taiwan. The direction of causality is crucial because it has significantly policy implications for economic development.

The main objective of this study is to evaluate the impact of maritime transportation instability on international trade instability based on wavelet smoothing and spatial panel data econometric method during the period 1990-2012. The results showed that the spatial effects have an impact on international trade instability. So that a sudden 100 percent increase in international trade in the neighboring countries will reduce 38 percent of trading in own countries. Evaluation of the results of spillovers elasticity of international trade instability showed that maritime transportation did not have a significant impact on international trade fluctuations and geographical concentration is the most important variable of instability in international trade.

Recognition of economic growth determinants is one of the most important concerns for economists. In the oil exporting countries oil revenues play a significant role for the economy alongside with other economic growth determinants. This paper attempts to investigate the role of oil in selected oil-revenue dependent economies. Since oil revenue goes directly to public treasury and is expended by the government, government’s management for this revenue would be crucial in the economy. This paper utilizes a proposed index, as Government Savings over Oil Revenues (GSOR). The higher level of GSOR suggests that governments finance their expenses by non-oil revenues more than oil revenues, which is a better situation. Findings from a Dynamic Panel Data model and GMM estimation method, on 12 oil exporting economies during 1990-2013, show that GSOR has significant positive effect on real GDP growth.

Among the theories explaining the relationship between creativity criteria in cities and economic growth, “Human Capital Theory” by Glaeser and “Creative Class theory” by Florida can be mentioned. Accordingly, present paper aimed at analysis of the creativity effect on regional economic growth and is presented in two theoretical and experimental parts. Considering the results of the current paper, there are no studies within new economic geographical theory in which the creativity explicitly points out to the growth model. In this paper, such research gap is filled and a model is presented within a new economic geographical theory as a theoretical achievement. The growth model is solved as a numerical model through using calibration technique as well as required data and information of Iranian Economic. The results obtained from sensitivity analysis show that the relation between growth and creativity is positive and concave. The concave of this model shows that growth in ration of creativity has the descending returns.

This paper examines the possible choices and energy security plans of China, focusing on its relations with I.R Iran and Saudi Arabia in the Middle East. Needless to say, these two rival countries in the region are both among the top oil producers of the world and China has deep and old cooperation with both countries. Meanwhile in its new strategy, China tries to establish a kind of balance among all oil exporting countries and strengthening ties to refrain from any challenges with countries in the Middle East. With its growing energy need, China’s involvement in this region is growing. The “One Belt, One Road” as china’s new grand strategy to build firm relationship with other countries has also paid great heed to the Middle East. This paper, using facts and statistics tries to analyze the future of Sino-Iranian and Sino-Saudi relations focusing on how China seeks to obtain its energy security by coordinating its relationship with these two countries. We concluded that China’s main strategy is to make a balance among all actors in the Middle East. Certainly in the near future, Iran and Saudi Arabia will try to obtain as much of Chinese oil market as they can, but lastly the main decision maker here would be China. We guess that Iran will win the game because Iran’s oil production and export had declined in past recent years (before JCPOA agreement) and with this strategy of China, it is Iran who gains the benefit in comparison to Saudis who lose some of their oil market.

Despite the importance of interaction between industrialization and health, this subject has not been studied sufficiently in Iran. In this regard, the aim of this study is investigating the impact of industrialization on health in Iranian provinces during 2009-13. The used data has been collected from the Statistical Centre of Iran and the National Organization for Civil Registration. The introduced indices have been combined using Standardized Score method for measuring the degree of industrialization and the levels of health in intended provinces. The interaction between industrialization and health has been tested by econometric panel data method. The results of this paper show that the Iranian provinces are not homogenous from industrialization and health perspectives. In addition there is no significant change in heterogeneity of provinces in terms of industrialization and health during the period of study. Also, the results reveal a significant and negative relationship between industrialization and health in Iranian provinces. This means that the industrialization process has reduced the health of provinces in Iran. So, in terms of policy, in addition to advantages of industrialization, its problems and disadvantages also should be taken into account. In the other words, paying attention to the external diseconomies of industrialization is necessary for successful implementation of industrial policies.

The study of determining the factors affecting inflation or consumer price index has been conducted by many macroeconomic economists nationally as well as internationally. In this paper, we assess the external determinants of inflation dynamics in Iran. For this purpose, we use an OLS single equation model and a vector error correction model (VECM). Results of the analysis reveal that money supply, exchange rate, import price index and intensification of sanctions are contributed in raising general price index in the long run. Long-run elasticity of inflation with respect to money supply, exchange rate, effective tariff and import price index are 0.25, 0.118, 0.087 and 0.71. Moreover, in every year that the severity of sanctions has increased, inflation increases with amount of 0.084 (or 8.4%).Results of OLS single equation model show that only 21% of the domestic inflation variance in short run is explained by the independent variables. Iran's inflation is driven mostly by exchange rate (with one season lag) and effective tariff (with two seasons lag).
In the short run, the coefficient of error correction term is -0.13 suggesting 13 percent annual adjustment towards long run equilibrium. General Price index of last year and unit price of imported goods of two years before are found to be positively related with general price index.

This study aims to examine the effect of investment and consumption spending on Indonesia’s economic growth. The data used is the quarterly time series data from the first quarter of year 2003 to the fourth quarter of year 2013, comprising consumption spending, investment and economic growth. For the purpose of analysis, the autoregressive distributed lag (ARDL) model is used. The result of the study reveals that there are long-run and short-run effects of consumption spending on economic growth. Meanwhile, the effect of investment on economic growth is not significant. The study also reveals that the increase in government spending on economic growth is 1.88% if the consumption spending rises by 1%.

The respective study covers three aspects; factors determining credit rating, credit rating impact on performance of entities and the relation between stock returns and credit rating. The study focuses on the firms listed in Taiwan Stock Exchange (TSE) of Taiwan. The empirical analysis uses the data of 50 firms rated by Taiwan Ratings Corporation (TRC) for the period 2010-2015. Two estimation techniques Ordered Probit Model and Panel Data Regression are applied. The findings show that credit ratings are predicted by specific important firm factors like size, growth opportunities, capital intensity, asset returns, sector type etc. Moreover, it is further suggested that firms with higher credit rating tend to have better performance. Performance is measured using return on investment and Tobin’s q factors. Likewise, high rated firms tend to achieve higher returns on their stocks. Similar study should be carried out using other credit ratings covering more firms and time span.

One of the key success factors of the financial institution sustainability is operational efficiencies. Using Data Envelopment Analysis (DEA), this paper measures the relative efficiency of the executing banking units of people business credit (KUR) program in Indonesia. Sample data of this study were obtained from all banking units from banks providing KUR located in the district of Pati, Central Java - district with the largest KUR receiver. This study consists of two stages of analyses: (1) it is found that 18 of the 35 banking units (51.43%) are in the scale efficiency, with units receiving 100% efficiency score being called efficient; (2) an output target is shown for the purpose of maximizing the output of the KUR disbursement without additional inputs.

This paper focuses on two major aspects of globalization: international trade and FDI and their impacts on manufacturing employment in Iran and study whether foreign direct investment and trade expansion with Asian and European partner played any role in shaping the Iranian manufacturing employment structure.
This study incorporates globalization (KOF index), trade integration and FDI into a single model and uses a system GMM estimator, which is more appropriate for a short panel dataset than the static or first differenced GMM estimator.
Result show that foreign direct investment corresponds positively to Iran’s manufacturing employment in both Asian and European trade partner. The findings show that globalization in Iran and Asian partner has no significant impact on employment. In terms of trade expansion, the role of bilateral exports with European partner is stronger than Asian partner.

Increased expenditures and the government size is an important issue in public sector economics. In this regard, various theories have been developed in order to justify the reasons for the public expenditure growth, and the theories have been empirically tested. One of the outlooks explaining the government expenditures growth and the economy size, is fiscal illusion approach. According to fiscal illusion theory and experiences, citizens generally do not have a correct perception of fiscal parameters systematically, so that they wrongly demand for more government expenditures. In this study, seasonal data for the period of 1994–2015 were used to test and analyze the fiscal illusion in Iran’s economy by applying autoregressive distributed lags model. Findings, obtained from the model estimation, indicate that the fiscal illusion in Iran’s economy can be explained from the variables of oil revenue and government debt in short-term and long-term, and indirect tax elasticity in short-term. Since the government uses oil revenue to finance its debt and budget deficit, the results may lead to fiscal illusion. In order to prevent fiscal illusion, using these sources should be gradually reduced as much as possible. As tax revenue itself generally does not result in fiscal illusion (based on the findings), the government should specify transparent fiscal rules by using tax revenues rather than oil revenues in order to prevent both the increasing government expenditures and fiscal fluctuations. According to the results, government should use more direct tax revenue. As government’s direct tax revenue, unlike other sources of revenue, does not create fiscal illusions, it does not result in excessive demand by citizens for public expenditures.