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Investigating the Effective Factors in the Growth of Private Sector Investment in Iran

Author

Listed:
  • Behnamian, Mehdi

    (Ph.D. Candidate in Department of Economics, Arak Branch, Islamic Azad University, Arak, Iran)

  • Shojaee, Abdul Nasser

    (Assistant Professor Islamic Azad University, Sanandaj Branch)

  • Haji, Gholamali

    (Assistant Professor, Department of Economics, Arak Branch, Islamic Azad University, Arak, Iran)

Abstract

Achieving sustainable development, obtained through growth and coordination among different economic sectors, is the most important economic goal of a country and the ineffectiveness of the private sector has been a serious obstacle to this subject in recent years. This study investigates the factors affecting private sector investment and determines which variables affect the growth of private sector investment at any point in time. The dynamic averaging model (DMA) was used in order to determine the factors affecting the growth of private sector investment: As a type of variable parameters over time (TVP) models, the DMA model presents the best model for determining private sector investment at any time. The paper investigates 8 variables, analyzing quarterly time series data of the Iran Central Bank from 2001 to 2019. The results indicate that the possibility of entering the variables of exchange rate, GDP, government spending and inflation is at a high level and the probability of entering the variables of liquidity and bank facilities is at a medium level, whereas the probability of entering variables of interest rate and business environment is low

Suggested Citation

  • Behnamian, Mehdi & Shojaee, Abdul Nasser & Haji, Gholamali, 2021. "Investigating the Effective Factors in the Growth of Private Sector Investment in Iran," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 7(4), pages 84-57, February.
    • Handle: RePEc:ris:qjatoe:0215
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Influential factors; private sector investment growth; dynamic averaging model; variable parameter models over time;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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