مجله اقتصاد و توسعه منطقه ای
پیاپی 19 (بهار و تابستان 1399)

Nowadays, the tourism industry has been on the agenda as an essential economic entity to provide material resources for countries. The tourism boom in each region depends on national and regional conditions and features, including government policies, social, cultural, and political factors in each region, natural and historical attractions, quantity and quality of services provided to tourists. As a result, due to the emergence of various facilities needed by the tourists, a situation to increase employment, economic income and thus improve the whole region's situation can be provided. As one of the largest and most diverse employment and income-generating industry, the tourism industry has been paid attention by many countries as an achievable goal in the sustainable development process. In this regard, Mashhad city has various and proper historical, cultural, and natural attractions for attracting tourists. These attractions, however, have the potential to attract tourists; but the prosperity of the tourism industry also depends on the quantity and quality of the tourism industry infrastructure and the facilities and services provided.

Theoretical Framework:

The tourism industry has played an important role in encouraging investment in infrastructures, generating revenue for the government, and direct and indirect employment generation worldwide. Today, attracting foreign tourists has become an increasing competition among institutions involved in the tourism industry. Because this industry not only plays a role in promoting the national economy and foreign exchange earnings but is a clean and pollution-free industry and at the same time creates new tourism occupations for countries with tourist attractions such as Iran and can become the most important source of foreign exchange earnings; provided that proper and comprehensive planning coupled with foresight is set and implemented for it. The industry also has the potential to be replaced by the single-product economy, i.e., oil revenues.Domingues et al. (2014) discussed the competitiveness of tourists’ destinations and compared Spain and Australia. The results show that in Australia, the quality of services, commercial brands, and appropriate infrastructure is very important for attracting tourists, and the climate and local tourist structures are the most important issues in attracting tourists in Spain. Tyrväinen et al. (2014) surveyed tourist destinations in northern Lapland, Finland, regarding environmental preferences and tourist accommodation. In a survey of 1,054 domestic and foreign tourists, respondents emphasized the relationship between accommodation and nature, green infrastructures, easy access to their accommodation site, and the environment's quality in choosing their destination. Therefore, one of the few natural attractions with pleasant and eye-catching views is Haft Howz Natural Park, located in the southeast of Mashhad in the Khalaj Mountains' heart. Its name has been chosen due to the existence of natural ponds created over the years in the heart of this region's rocks.

The present paper aims to prioritize economic strategies to improve the Haft Howz region's tourist attraction, including 28 factors, which consist of 4 main criteria including infrastructure, investment, socio-economic, and marketing. Fifteen experts and Managers of the Haft Howz region were interviewed, then a questionnaire based on the AHP method was provided, and finally, the questionnaires were analyzed in Expert Choice software.

Conclusions and Suggestions:

As mentioned before, the tourism industry, especially for developing communities, is both an opportunity and a threat. Also, it is a powerful incentive for socioeconomic progress. The studies show that regarding the fundamental problems, including problems related to infrastructures, problems related to investment and management, socioeconomic and marketing problems, Iran's ecotourism program's goals will not be achieved. Since the metropolis of Mashhad, as the largest shrine in the country, annually receives 10 to 15 million pilgrims, an effective step can be taken for the economic development of Mashhad city by applying appropriate policies in the field of the tourism industry. Identifying and prioritizing economic solutions of tourist attraction in Haft Howz Region of Mashhad, which has undeniable importance in helping respective authorities and planners promote this region, have been discussed.  The AHP (Analytic Hierarchy Process) results to identify indexes weights indicate that as per the region’s experts and managers, indexes of infrastructure, investment, socioeconomic, and marketing are important and have priority in ranking indexes, respectively. The results of the ranking of all economic sub-criteria for upgrading the tourist attraction of Haft Howz region of Mashhad showed that the sub-criteria of securing and improving the entrances and upgrading public transportation from inside the city to the region, providing adequate and proper public health facilities and upgrading infrastructure equipment (parking, water supply, gas supply, proper lighting and the like) are placed in the first to third priorities respectively. The upgrade, completion, and reconstruction of historical monuments of the region are the last priority. Therefore, researchers are suggested to conduct a study to analyze the operational suggestions for removing regional barriers to improve the region.

Intellectual capital is defined as "the ability to transfer knowledge and intangible assets to resources for wealth creation. Intellectual capital can be recognized as knowledge-based assets that underpin the growth of the country. Knowledge increases the country's wealth if its importance is known and is different from the existing work practices, and Knowledge transfer is essential in this regard. Intellectual capital can be recognized as knowledge-based assets that underpin the growth of the country. In recent decades non-financial assets that constitute intellectual capital are the most important source of wealth creation and national progress. Knowledge and information are the main features of nations seeking development.

Theoretical frame work: 

  Investing in intangible assets is recognized as an essential factor in improving performance. Companies and countries' attention to the use of knowledge has led to creating competitive advantage and the implementation of national and regional innovation systems. Intellectual capital is an abstract and complex concept that is difficult to identify and define and can be examined at firms and countries. Most of the observations have been from the classification of intellectual capital to human capital, communication, and structure, and this model is used in many measurements at the organizational and national levels.

This paper examines the impact of intellectual capital on Iran's economic growth using the system dynamics model.  The system dynamics model is one of the best scientific methods for complex models such as technical, economic, and nonlinear dynamic systems. It is, therefore, appropriate to monitor and evaluate the effects of intellectual capital on economic growth. It is an advanced method of analyzing the dynamic behavior of a complex system. The dynamics model structure gives a better picture of complex systems such as the intellectual capital system and the economic growth system. In this study, the indirect effect of this factor on economic growth has been investigated by changing the factors related to intellectual capital. Realism test and limit condition test, and sensitivity test of variables were performed to examine the behavior of variables, as a result of which the model of this research showed a logical behavior. The study period is 2001-2015, and its simulation is planned until 2031. It is also confirmed based on the DOLS model

Within the framework of this study, three hypotheses were examined. According to the first three hypotheses, with increasing intellectual capital, productivity increases and increases with increasing economic growth productivity. Of course, this effect does not happen quickly and is delayed. According to the second hypothesis, when human capital increases, intellectual capital also increases, and according to the third hypothesis, intellectual capital doing activities in a new and better way leads to higher productivity. The results obtained from the system dynamics model indicate the positive and small impact of intellectual capital on Iran's economic growth, which is also confirmed based on the DOLS model. The reason for the small impact of intellectual capital on growth is the lack of infrastructure and complementary conditions that can be provided with appropriate planning and policies.

Conclusions and Suggestions:

From the policy applications of this research, it is important to note that if the high growth of intellectual capital is to be fully effective in economic growth, there must be other conditions that are not entirely possible in the real world but can be Reduce this gap with proper planning and policies. Another important point is the importance of paying attention to the development and promotion of human capital to increase human resources productivity and the development of intellectual capital, which policymakers should consider. To improve the status of human capital, it is necessary to pay more attention to the development of skills and capabilities of the workforce at the beginning and during entry through rational investments in secondary and higher education and skills training. In conclusion, the discussion of intellectual capital, given that it is a new topic, has a very important and valuable role in individuals' prosperity, improving living standards and income, increasing knowledge and skills, production capacity, economic growth, and poverty reduction. It should be noted that the economic attitude to intellectual capital (on education and training) is very useful for the country's productivity and guarantees the country's success and economic progress.

In the last decades, economic growth is one of the important issues among researchers because economic growth rate is one of the important factors in investigating the performance of different countries' economic policies. So, an investigation of influencing factors on economic growth is necessary. Entrepreneurship can significantly impact economic growth by creating innovation, design, diversity of product production, and increasing the efficiency and competition of firms, and also higher economic growth will also increase the incentive of innovation and knowledge for entrepreneurs. Also, countries that are on the path to economic growth lead to motivating entrepreneurs innovation and knowledge. As a result, economic growth can affect creating entrepreneurship. Therefore, economic growth and entrepreneurship are recognized as two essential components in economic. In recent economic theories, institutional factors are influential in assessing the relationship between economic growth and entrepreneurship. Therefore, this research seeks to investigate the interaction effects between entrepreneurship and economic growth, emphasizing the quality of institutional factors using the simultaneous equation model and panel data for the OECD and OPEC in the 2000-2016 periods.

Theoretical Framework:

Entrepreneurship is a purposeful activity to create, maintain, and develop profitable businesses. These entrepreneurial activities can be considered three sections: 1) Total entrepreneurial activities; 2) Opportunity for entrepreneurial activities; 3) The need for entrepreneurial activities. The combination of these three components creates a new index called global entrepreneurship. From the perspective of the institutionalism approach, the environment shaping the economy affects entrepreneurship dynamics within each country. This environment is known through interdependencies between growth, economic development, and institutions. Entrepreneurs are the main perpetrators of change that react to unplanned stimuli within the institutional framework.

The present study seeks to assess the interactions between entrepreneurship and economic growth and its relation with institutional quality using the simultaneous equation approach in panel data for two groups of OECD and OPEC countries during the period 2000-2016. The two groups of OECD and OPEC countries differ significantly in terms of economic structure. So the results may be different for them. The selection of these two groups of countries can help obtain actual results of the relationship between entrepreneurship and economic growth and the role of institutional quality on them. Many studies have shown that there are two-way feedback effects between economic growth and entrepreneurship. This feedback on both sides leads to the bias results in the traditional regression. Therefore, in such cases, the system of simultaneous equations is used. In this research, instrumental variables (IV) and generalized method of moments (GMM) methods are used to estimate the equations. The explanatory variables for the economic growth equation are entrepreneurial index, institutional quality index, life expectancy, total government expenditures, fixed capital formation, and labor force growth. The explanatory variables for the entrepreneurship index equation are economic growth, the number of formal stages of starting a business, trust in ability and skill, and institutional quality index.

The results indicate that the variables of economic growth and entrepreneurship have a positive and significant effect on each other, and also the institutional quality variable also has a positive effect on the relationship between the two components. Also, for the OECD countries, the variables of life expectancy, the growth rate of fixed capital formation, and the labor productivity growth have a positive effect, and the total government expenditures hurt economic growth. For the OPEC countries, labor force growth has a positive effect, and total government expenditure has a negative effect on economic growth.

Conclusion and Suggestions:

This research seeks to assess the interaction between entrepreneurship and economic growth with an emphasis on institutional quality. Based on the empirical findings, economic growth and entrepreneurship variables have a positive and significant effect on each other, and the institutional quality variable also has a positive effect on the relationship between the two components. According to the results, encouraging entrepreneurship, the growth of the real private sector in the economy, and the reduction of business start-ups to increase economic growth are recommended.

Recently, the role of industrial structure on regional employment has attracted much attention. One of the branches of these studies, focusing on Jacobs (1960), suggests that more diversity of industrial structure leads to employment and protects the areas against the adverse effects of external shocks. Jacobs's hypothesis has been validated experimentally in many studies. These studies provide a positive relationship between regional economic diversification and employment growth. Following the increasing trend of studies related to economic diversity on employment growth, regional employment models have also been focused on considering spatial dependency. In terms of industry structure, the more diverse areas can be benefited from their externalities, while more diversity within a region improves technical innovations and their impacts. According to Iran's provinces' employment rate, we found a significant regional dispersion between different regions. Although regional employment growth has received more attention from scholars and policymakers than ever before, few empirical studies have been conducted on the relationship between R&D specialization and diversification and regional employment growth. Therefore, this paper aimed to investigate the spatial effects of R&D specialization and diversification on employment growth in the Iranian provinces from 2005 to 2015.

For this study, R&D specialization and diversification in Iran's provinces were first measured, and then the spatial effects of each of these variables on the employment growth of Iranian provinces were estimated using an econometric model. According to Chen& et al. (2015), the Gini index has been used to measure the degree of R&D specialization. Following Ocaner et al. (2018), total diversity is measured by total entropy and related and unrelated diversification.

Given that this study's spatial unit of choice is based on administrative boundaries rather than economic regions, it might be expected that spillovers would exist from the neighboring region. So a full Spatial Durbin Model (SDM) specified, which takes the form of the following: (1)The SDM allows for the observed value of neighboring region employment growth () and other regional characteristics of neighboring regions' employment () to impact a regions’ employment growth rate. The coefficient  shows the impact of employment growth in neighboring regions on the employment growth rate of a particular region or, in other words, the spatially lagged dependent variable. (Ocaner et al., 2018)According to Table 1, the results of the estimation of equation1 showed that employees in the sector of services and relevant or irrelevant specialization and diversification had a significant positive effect on employment growth so that the effect of specialization was more than that of irrelevant diversification and the effect of irrelevant diversification was greater than that of the relevant diversification.

 Conclusions and Suggestions:

The findings of this study supported the Jacobs hypothesis for the Iranian provinces. Also, there was a reverse U-shaped relation between economic specialization and employment growth, indicating that as R&D specialization increased, provincial employment growth increased, but the specialization led to a decrease in employment growth at higher levels. Therefore, as R&D specialization increased, productivity increased, and it was replaced by employment growth. So, the Marshall hypothesis was supported by a range of specialization. For more precise analysis, direct, indirect, and total effects have been calculated. The indirect effect measures the effect of changes in the region j on the dependent variable in region i, which i≠j. The direct effect measures a particular explanatory variable in region i on the dependent variable in region i. The calculation of direct and indirect effects showed that increasing R&D specialization in one region could affect employment growth of the same region; however, it had no significant effect on the adjacent regions' employment growth. Increasing the irrelevant diversification in each region also led to employment growth in the same region, but increasing the relevant diversification in the adjacent regions resulted in a decrease in the host region's employment growth.Increasing the average income of the adjacent regions decreases the host region's growth rate and leads to the host region's employment growth. Thus, the limited influence of entropy related to the growth of provincial employment indicates evidence of transmission mechanisms between regions. Indirect results indicate a significant spatial spillover, and the evidence from estimating direct effect indicates that geography is essential in terms of neighborhood zones. Therefore, in developing programs and policies of increasing employment, it is necessary to pay attention to the potentials of the region and the influence of neighboring areas. It is suggested to deploy industries with more diversity in provinces with lower employment rates. So, creating industrial clusters as a unit for all of the provinces is not a suitable policy. Also, increasing the specialization index by increasing R&D expenditures in areas with a high unemployment rate can increase employment. From this perspective, granting specific and increasing tax credits to the firms in exchange for R&D can be helpful in increasing the employment rate of the province.

The business environment is one of the determinants of any country's economic status and based on it, each country's economic conditions can be studied and analyzed. The more transparent and competitive business environment, the better economic health, adoption of favorable policies, and improvement of economic indicators.In other words, the effect of a favorable business environment on increasing the attraction of domestic and foreign investment, job creation, and growth of GDP is quite evident (Mehrabani et al., 2016).In an economy, several factors affect the business environment. One of the most important of these factors is corruption. Numerous studies on corruption show that corruption can be detrimental to an economy. The extent of the destructive effects of corruption depends on the degree and level of the national economic development. Corruption initially hinders and reduces economic growth by reducing the incentive to invest. It then prevents growth from growing by restructuring government spending. Corruption in various ways undermines economic growth. This social dilemma prevents expanding the market mechanism by deviating from the allocation of resources and incentives. It also leads to the weakening of property rights and the non-guarantee of benefits arising from the provisions of contracts and to the detriment of small businesses (Tanzi, 1998).

 Theoretical frame work:

Theoretically, there is a significant relationship between the negative consequences of corruption and bribery and ease of doing business. In most newly industrialized countries, such as India, Brazil, and the Philippines, it has been observed that the good quality of business rules and regulations has led to the growth of such activities and possibly encouraged foreign direct investment. The road has acted in favor of the economy at the macro-level (Sung, 2013).

Considering the situation of Iran and selected Islamic countries in terms of the business environment and because improving the business environment has been one of the most important challenges and goals of macroeconomic plans in Iran in recent decades, therefore in this research, the effective factors on the business environment studied for 2005 to 2018 with emphasis on the corruption in the selected Islamic countries. To do this, the data was extracted from the World Bank's database and the International Organization for Transparency, and the research model was estimated using the quantile regression method.In this study, the corruption variable was measured by the Transparency International Corruption Perceptions Index, and the World Bank Business Index measured the business variable.

The results show that a high level of corruption hurts the ease of doing business in countries and worsens the business environment. Unemployment and inflation rates as indicators of economic instability have a negative impact on the business environment, But at the 5% significance level, the effect of the unemployment rate is only statistically significant in the first, second, and third quintiles. Also, tax revenue, trade openness, and exchange rate volatility have negative, positive, and negative effects on the business environment. These effects are statistically significant at a 5 percent level of significance.

Conclusions and Suggestions:

Considering the negative impact of corruption on the business environment, it is suggested that by implementing policies such as e-government development, reducing government size, improving the culture and level of public morality by promoting condemnation of corruption and bribery, preventing government influence in regulatory and inspection bodies, eliminate Excessive guidelines and regulations that increase the potential for abuse and corruption, reform of organizational culture, expand the free flow of information and encourage people to report corruption, stabilize business laws, enforce preventive laws and regulations, and tackle economic corruption seriously and decisively. The level of corruption in the country is controlled and as a result, by controlling (reducing) corruption, the business environment becomes favorable.According to the research results, inflation and unemployment as two indicators of macroeconomic instability have a negative impact on business in Iran and selected Islamic countries. Therefore, the Central Bank must control the country's liquidity and inflation by implementing monetary policies commensurate with its economic situation. The government should also improve the business environment by implementing appropriate employment policies and increasing the country's employment level.Given the negative impact of exchange rate fluctuations on the country's business environment, the central bank, and the government, to create confidence in the foreign exchange market and prevent exchange rate fluctuations, should implement exchange rate policies appropriate to economic and sanctions conditions and minimize exchange rate fluctuations.Given the positive impact of countries' trade openness on the business environment, the adoption of appropriate policies in the field of trade liberalization to take advantage of trade opportunities and capital in the global economy and the development of exports of services and goods and thus improve the business environment is proposed by the government.

Economists emphasize the endogenous and exogenous causes of the bank deferrals related to loan repayment. Whereas banking experts classify the causes of loan default as external and internal organizational factors. According to targets of article 2 of the agricultural bank of Iran the Statute (2020), this bank should provide credit facilities for a better life in the countryside, increase the income level of villagers, increase agricultural production, develop SMEs located in rural areas, and participation in related activities. Therefore, to achieve the goals of providing financial resources, it is important how the resources are absorbed and how they are returned. Studies by Hassanzade and Habibi (2010), Shabani and Jalali (2012), and Bafandeh et al. (2015) regarding the crisis of bank deferrals in Iran indicate that the role of indigenous factors is more decisive than exogenous factors. The study Arabmazar and Roeintan (2013) is dedicated to non-timely repayment of bank facilities have most important to bank deferrals than other factors. Most of Iran's bank deferrals studies paid attention only to exiguous factors and did not pay enough attention to endogenous factors. As observed, recent research has considered the important factors of this bank deferrals problem, but none of them work on the interest factor as a crucial factor, and we must address this in this study.

Theoretical frame work:

In the theoretical section, we draw Minsky's theory concerning bank deferral and financial crisis to provide a theoretical for identifying the factors that have influenced the improvement of loan repayment. Goldsmith (1969) and (1973), McKinnon, and Shaw (1973) argued for financial liberalization versus financial repression. The common denominator in these studies is focused on financial liberalization; setting a ceiling for interest rates inevitably leads to a small constraint on the credit system that the result is a low level of saving and investment.  In contrast, Minsky (1995:1) mentioned that in the post-second World war period, the OECD could control the rate of interest instead of money supply and achieve "the golden age of capitalism".  

Multiple logit regression (MNLR) is simply a generalized or extended dual logit regression with more explanatory variables. In other words, we want to investigate the simultaneous effects of several independent variables on the dependent variable y. MNLR regression is also known as multiple and multi-state logit because it is used to model the relationship between a multi-state response variable and a set of independent variables. A multi-state response variable can be a sequential variable or a nominal variable.                      

Since 1936 there has been a serious debate among Keynesian and Walrasian economists on the role of money and finance. Walrasian economists reject the finance dominance of capitalist economies. While, Mineski (1995: 3), upon on the modern version of the Walrasian of general equilibrium theory, ignores the finance dominance of capitalist economies. If economic theory is to be relevant for the intense finance world in which we live, it fully incorporates financial factors into determining the economy's behavior in the economy. Such a theory should not hold that financial factors are "exogenous shocks" to the economy or explain whatever malfunctioning an economic theory economy is. Money and finance as nominal variables do not play a dominant role in the preferences, commodities, and services of the economy resulting from the incompetence of central bankers.

Result and Suggestions:

Our finding on the empirical sector shows disagreement among economists about the impact of interest rates on bank deferrals. The relationship between loan size and the amount of loan deferral penalty is another of the most challenging issues among theoreticians of loan and credit. Our study results on variables of repayment and extension loan have a significant and negative effect on improving the bank repayment, which in this regard is consistent with the study of Ferdowsipur et al. (2013). Other findings indicate a direct relationship between interest rates and default of loans on the one hand and the number of installments in the improvements of payment of bank claims on the other hand, which is consistent with Ashraghi et al. (2015), Makorere (2014) and Ferdowsipur et al. (2013).

One of the most important concerns of political and social thinkers over the centuries has been the determinants of political stability. A society is considered to be fully developed and stable when, in addition to economic development, it is also developed in the social and political fields, enabling citizens to evolve in a harmonious way. By using revenues from the abundance of natural resources, rentier governments can overcome challenges such as low economic growth, poverty and accountability, corruption and the lack of the rule of law, and ensure their political stability. On the other hand, good governance is an important factor in the economic and social development of countries and its promotion leads to more open and democratic societies. Given these issues, the main question of the present study is what effect does the interaction of good governance and the rentier government have on the political instability of OPEC member countries? This article argues that revenues from energy exports and good governance can bring political stability to OPEC member countries.

Theoretical frame work:

The rentier government curses the resources and the impact of rents on social, economic, and political life in resource-rich countries. To analyze this issue, Michael Ross (Ross, 2001) provides a framework which argues that the effects of the rentier government can be classified into three groups: 1) The effect of rentier: Based on Ross's argument, this can be claimed that resource-rich governments tend to use rents to reduce social pressure and in this way they gain more independence from the public (Ross, 2001: 329). He also stated that the behavior of the rentier government can be explained in three ways: A) The effect of taxation b) The effect of cost c) The effect of group formation. 2) The effect of repression: rent revenues allow governments to do this to strengthen its power and thwart democratic aspirations, spend more on internal security. In addition, supporting resource extraction is crucial for rentier governments, so investment in security apparatus is likely to be made to protect these resources.Richard Auty was the first researcher to introduce the "resource curse" theory. This theory states that based on new evidence not only many resource-rich developing countries do not enjoy the benefits; They may, in fact, perform worse than less gifted countries (Auty, 1993: 77-78). In addition, the research of Sachs and Warner On analyzing the economic performance of resource-rich countries during the years 1970-1989, It paved the way for a dramatic increase in resource curse studies. As a result, their study showed that there is a causal relationship between the intensity of natural resources and economic growth (Sachs & Warner, 1995: 6398).

The hypothetical test method in the present study is the dynamic panel data method (GMM) during the period 2010 to 2018. In this study, six components of Control of Corruption, Government Effectiveness, Regulatory Quality, Rule of Law, Voice and Accountability, and Political instability/No Violence & Terorism have been used as indicators of good governance and with oil (rent) revenues on the political instability index has been examined separately. Research data gathered from the Institute for Political Risk Services and World Bank data (WDI 2020) for OPEC countries. In addition to checking for the lack of colinearity between the independent variables entered in the model, tests related to normal residuals, homogeneity of variances, the independence of the residuals and the absence of model specification error (linearity of the model) were also performed.

According to the coefficient of determination indicates a good fit of the pattern and the variables used in it show the explanatory power of the model by 63%, which is a good number considering that the method used is panel data. Durbin Watson's statistic also shows no autocorrelation and shows the number 1.8. The F-statistic in this fit also denies that the coefficients are zero. The sign of coefficients is all presented in accordance with theory and theoretical foundations. The j-statistic statistic is the same as the Sargan statistic used to test the correlation between residuals and instrumental variables. The findings of this study show that the effect of the rentier state variable on the political instability index of OPEC countries is positive and significant, and the effect of accountability indicators, government efficiency, corruption control, rule of law and no-violence as indicators of good governance in OPEC countries are negative and significant on the political instability index.

Conclusions & Suggestions:

According to Ross, the legitimacy of rulers through rent instead of free elections causes So that rentier governments can invest more of their revenue in sponsor networks to prevent the emergence of democratic demands of citizens. Ross believes that rentier governments tend to form follow-up support groups to prevent the formation of social groups independent of the government. In other words, opposition to the status quo or independent social groups is likely to be suppressed by governments, because they are seen as a threat to the existence of their governments that this leads to the political instability of the regime. Interactive effects of the three indicators of accountability, corruption control and the rule of law along with the rentier state on the political instability index of OPEC countries is negative and significant.

Since the mid-1990s, a growing body of research has investigated the relationship between global networks of international trade, information flows, and migrations. Whereas traditional trade theory (e.g., the standard Heckscher-Ohlin model) suggests that the movement of goods across borders can substitute for the movement of production factors, the bottom line of this branch of research is that the two complement each other. However, there is sizeable empirical literature (e.g., Felbermayr & Toubal, 2012; Felbermayr & Jung, 2009; and Parsons & Vezina, 2018) suggesting a positive nexus between migration and bilateral trade.

Theoretical framework:

Two main arguments have been used in the literature to explain such a positive link. Firstly, international migrants provide additional information on their origin country and reduce the bilateral cost of a trade, stimulating the host country's exports towards the origin country of immigrants. In this regard, migrants help domestic firms overcome cultural barriers to trade (e.g., language and local taste of consumers) and create international business relationships (Figueiredoa, 2020: 406). In recent empirical and theoretical studies, information costs have been introduced as a deterrent to trade (Steinwender, 2013; Allen, 2014; Chaney, 2014). In addition to immigrants' knowledge about informal institutions in the origin country, immigration prevents the opportunistic behaviors of some that are weak institutions in international trade. Therefore, it is expected that further migration will facilitate bilateral trade. (Parsons & Vezina, 2018; 210) Secondly, immigrants have preferences for consuming goods/varieties produced in their own country of origin (Figueiredoa, 2020: 408).Most of the literature has a common empirical strategy, based on the estimation of a log-linear gravity model where bilateral trade flows are regressed over standard explanatory variables (economic mass and distance), the stock of immigrants from specific partner countries, and other controls aiming at capturing various types of trade costs (common language, colonial relationships and the like). Other standard control variables include neighborhoods, language sharing, and free trade agreements.

This paper investigates the impacts of migration on trade networks between Iran and 25 of its trade partners in 2015, using the spatial regression method. The statistical population of this study is Iran's trading partners, including 25 countries with the highest trade value with Iran in 2015, respectively China, UAE, India, Turkey, South Korea, Switzerland, Germany, Italy, Pakistan, Netherlands, France, Russia, Singapore, Brazil, United Kingdom, Oman, Thailand, Spain, Vietnam, Belgium, Japan, Egypt, Malaysia, Kuwait, and Azerbaijan. 

The estimated model in spatial regression form is as follow: is log sum of export and import from origin i to destination j country,  is log stock of immigrant from origin i to destination j country,  and  are origin and destination population,  and  are origin and destination gross domestic product,  is dummy variable for having a common border,  is a dummy variable for having a common language and is the inverse amount of geographic distance between origin i and destination j country. W is the matrix of commercial networks that calculate from a hypergeometric distribution, which is used in various fields from genetics to network theory. According to the estimated trade network matrix, Iran has trade networks with eight countries: Azerbaijan, China, India, Kuwait, Oman, Pakistan, Turkey, and the UAE. It also has an immigration network with three countries: Germany, Turkey, and England. In other words, Iran and Turkey have not only trade networks but also migration networks.

  Conclusion and suggestions:

Due to the variable coefficient of migration, a one percent increase in immigrant stock caused an increase in bilateral trade flow by 0.28 percent. In other words, in contrast with H-O theory, migration and trade complement each other, which is consistent with most recent empirical studies. The development of regional trade agreements is a way to prepare countries for the globalization process and protect the economies of developing countries from global competition. Therefore, facilitating migration in the countries of the region and trade agreements leads to regional growth. It can also strengthen countries' competitive advantage in various markets and increase intra-regional investment.The results show that trade networks between countries lead to strengthening bilateral trade flows and leading countries to increase trade relations.  The existence of various fields of cooperation, including cultural, religious, linguistic, andeveryday religious fields, has provided cooperation. Nevertheless, to direct the trade activities, creating a trade bloc can also result in regional growth. Almost worldwide, homogeneous blocs and trade unions have been formed at different levels, and regionalism becomes an incentive for countries to have a corporation with each other, regardless of their sizes.Also, due to the significant coefficient of spatial error, the effect of external shocks in countries with trade networks on other countries' bilateral trade flow is significant. Therefore, efforts to increase security in trading partner countries alongside trade relations and help eliminate tensions and create calm will reduce Iran's trade risks.