Iranian Journal of Economic Research

Abstract World trade has grown remarkably quickly in the past decades. Some researchers believe that despite growing trade, the rate of world trade is less potential amount that it can be achieved. From the perspective of these researchers, in addition to transportation costs and customary transaction costs, there are other intangible costs that reduce trade. Quality and efficiency of institutions are one of the factors that can affect the exchange costs. In this paper, we have studied the effect of institutions on trade flows of selected countries in the Middle East by using gravity model and panel data method between 2002 and 2008. The results show that compare to other factors on bilateral trade, the quality of institutions has more affect so that one unit increase in quality of institutions index in exporting and importing countries, would respectively induce 1/58 and 0/7 percent increase in trade between pairs of countries that we have studied. Therefore countries with better institutions are more willing to trade.

Abstract The main objective of this paper is to determine the causal relationship between trade openness and financial development in non oil and oil exporting developing countries using a VAR model. The results indicate that there is a variety of causal directions in these countries. Therefore, we cannot conclude on one causal direction for all countries or a group of countries (such as developing countries, non oil and oil exporting countries).    

Abstract This paper focuses on the relationship among structure, conduct, and performance (SCP) for a sample of 141 four-digit industries during 1999-2005 in Iran. For this purpose seemingly unrelated regression estimation (SURE) method is used to estimate the parameters of the models for profitability (the ratio of profit to sale), concentration (the inverse of the number of firms in industry), and advertising. Results show that profitability is determined by advertising, which in turn, is affected by profitability. In addition, there are positive relationships among advertising, research and development expenditure, concentration, growth rate of industries’ sale, ratio of investment to sale, and profitability. 

Abstract This study empirically analyses bilateral J-curve dynamics of Iran with her six trading partners using time series data over the period 1979 - 2005.  Short and long - run impacts of the depreciation of Iranian Rial on the trade balance between Iran and her six trading partners are estimated by using Auto Regressive Distributed Lag (ARDL) Approach and Error Correction Model (ECM). The empirical results indicate that there is J-curve effect in the short-run between Iran with China and UAE, but in the long - run, the real depreciation of the Iranian Rial has positive impact on trade balance with UAE. The stability of the long-run trade balance equations are tested by using CUSUM and CUSUMSQ stability tests.

Abstract this paper following Lakonishok (1992) and Sias (2004), we examine the presence of herding behavior among active institutional investors, test the presence of momentum strategy (as a determiner of herding behavior) and the correlation between herding behavior and weekly, monthly and quarterly stock return, using time series data (2006 – 2008) in the Tehran Stock Exchange. Our findings confirm the presence of herding behavior among the institutional investors and show that its intensity is higher than the developed countries, but they reject the presence of momentum strategy and its role as a determiner of herding behavior. Furthermore, the results show that the herding behavior of institutional investors does not affect the market return and has no correlation with the past and future returns.  

Abstract One of the most fundamental outputs of social security systems is the redistribution mechanism. With moving from FUND to PAYG position and vice versa, the system shows intergenerational redistribuation and within-cohort redistribuation effects, depends on financial organization. According to the law, the mechanism considered for social security system in IRAN is FUND. Thus, we expect within-cohort redistribuation. This research tests this important note with evaluating insured individual accounts. The resualts show, in different target population deciles, internal rate of return (IRR) is 47 to 85% with average 53% and benefit – cost ratio (B/C) is 2.6 to 10.3 with average 3.7. This indicates that the necessary investment rate is 53%, while with current optimistic assessment, this rate is 30% for long-term, which shows intergenerational redistribuation. The effect inflation increase on redistribution test indicates current and future generation losses and also intensifying intergenerational redistribuation

Abstract One of the main concerns that many countries of the world are encountering, is some economic activities which are usually hidden from official view. These activities could effect deviation from correct position and prescribe incorrect polices. In this study, after short review on concept and different distances of shadow economy to try that investigated effects of shadow economy volume on economic growth for 1981-2007 by vector error correction model (VECM). Shadow economy was estimated by fuzzy logic method. Results indicated that in Iran, with increase of one percentage size of shadow economy, 0/38 percentage diminished economic growth.

Abstract Regulations making is one of the forms of government interventions in economy. Regulations can change business environment and hence employment, production and productivity. Labor Law is one of the important forms of regulations in Iran that was modified in 1369 in favour of labor. Some studies show that the reduction of labor demand in industry has been the outcome of this amendment. We estimate the labor productivity in the Iranian Industries using the fixed effect method. The results of current study suggest that the amended labor law has increased productivity of all industries but wood industry.