Iranian Journal of Economic Research

Abstract   It is argued that foreign banks entry can improve the process of development by technology transfer and access to new international funds. This paper investigates factors affecting foreign banks entry. The theoretical model is based on Markowitz portfolio model, in which a bank decides to invest on “portfolio of countries” according to their potential country risk and return. To test various hypotheses, we construct a panel data model for 10 year across 30 countries. The results confirm the “follow up” theory: banks follow their clients to meet their needs in another country.  The policy implication for authorities is that in order to attract foreign banks, they may consider participation of foreign companies in other industries. Banks are expected to automatically follow their clients and open up new branches at that country.

Abstract It is assumed that major factors of production are all in full employment condition in the Iranian economy. Land sector, however, indicates a rather peculiar situation, as it seems to be in a disequilibrium condition. On the one hand the need for housing and business indicates a high demand for urban hand, while on the other hand the supply of building are limited with many lots held as idle, and not supplied in the market. It seems that regulating land sector would have positive impact on economic activities. In this study, we apply a dynamic computable general equilibrium framework to study the land tax effects on the economy. We show that land tax is a neutral tax without any distorting effects, increasing Iran's GNP, per capita saving and per capita welfare indices by 0.32, 0.33, 0.647 and 0.2 percent, nespectinely in the long run.

Abstract The main objective of this study is to estimate the long-run relationship between exports and environment quality indices for Iran over the period 1971-2007. In this study, the CO₂ emissions and arable land are used as a proxy for the environmental quality. We estimate the model using the multivariate Johansen's co-integration technique. The results reveal that there is a long-run relationship between exports and CO₂ emissions and arable land. Moreover, the variables of exports and FDI have negative and significant effects on the environmental quality indices.  

Abstract This paper investigates the role of property right and regulation in credit, business and labor markets on economic growth by using two panel data models for 80 countries during 2000-2005. The first model considers legal structure and total effect of regulation on economic growth and the second model investigates three main component of regulation; i.e. regulation in credit, business and labor markets and property right on economic growth. findings of the first model show labor force, human capital, capital stock, property right and regulation have positive effect on economic growth. And according to the second model property right and regulation in credit and labor markets have positive effect on economic growth.
 

Abstract The annual data on economic growth and energy consumption in Iran during the period 1352-1386 is used to study the effect of energy use on the growth of Iranian economy. To that end, a smooth transition regression model is used. The selected model has two regimes and two thresholds. Regime one starts from 1353 and ends in 1362; while the second regime covers the period 1363-1386. The results show that the energy use had a negative effect on the economic growth in both regimes, and that the effect is larger in the first regime. Therefore, based on these results the growth hypothesis does not hold in the Iranian economy. This could be considered as a sign of inefficient use of energy in Iran.

Abstract Following the fisher’s hypothesis about the relationship between asset returns and inflation, numerous studies have tried to test the hypothesis with various data sets. Contradiction in the findings resulted to the proxy hypothesis of Fama (1981). In present article, survey the theoretical and empirical literature, and conduct a test for inflation hedging ability of land, gold and stock in Iran. Considering the seasonal characteristics of the data (1385-1355), we use the HEGY (1990) unit root test, and VECM methodology to estimate long and short run relationships. Our findings show that in the long run, all three types of assets hedge against inflation. However, in the short run, we observe that money reserve, oil prices and real GDP are significant determinants of the assets returns.

Abstract This  paper   surveys theoretical  foundation  and   empirical   results of demand for  smoking: Theoretical foundation  is  based  on  a model of habit effects .Empirical results is based on a regression for smoking demand in Iran for the period 1363-1379 (1984-2000). The quantity demanded is determinded by price ,income ,literacy, unemployment and divorce  rates .The  elasticity of demand with  respect to first four variables are -0.27, 0.44, 0.2   and  -2.54, respectively.The  divorce  rate is not significant.Thus cigarette  is an inelastic  and normal necessity  good. Also, the significant coefficient of the quadratic  term of income confirms the satiation effect. Accordingly, prohibitive policies based on price are not successful  and  it is necessary  to  make a shift to  non- price measures.

Abstract Management of Foreign exchange reserves is important for every country. This matter is also of particular interest for Iran as an Oil exporting developing country. This paper designs an optimal portfolio for that part of foreign exchange incomes which is used for investment. Using the data on foreign exchange daily returns, for the period 2000-2008, and applying univariate and multivariate Garch models, we estimate a model which maximizes expected returns subject to a Value-at-Risk constraint. The results are examined using Backtesting, and then the most acceptable model is suggested. The results that the multivariate GARCH model is the most efficient method for selecting the foreign exchange optimal portfolio in Iran.