Foreign Capital Inflows and Economic Growth of Iran

Mohammad Mowlaei ()
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Mohammad Mowlaei : Department of Economics, Bu-Ali Sina University

Journal of Money and Economy, 2017, vol. 12, issue 1, 37-54

Abstract: Nowadays, Foreign Capital Inflows (FCIs) are considered as a catalyst for economic development and an important source of transferring technology and foreign exchange earnings from developed to developing countries. The purpose of this paper is to estimate the impact of FCIs (which include foreign direct investment, personal remittances and official development investment) on economic growth in Iran. An Autoregressive Distributed Lag (ARDL) approach is used over the period 1992-2016. The results indicate that all the three of foreign capital inflows have positive and significant impacts on economic growth in the short-run and long-run. However, Foregin Direct Investment (FDI) and Public Relations (PR) have more effects than Official Development Assistant (ODA) on economic growth of Iran. The study suggests the design and implementation of appropriate fiscal, monetary and trade policies to complement the flow of foreign capital inflows to realize of its full impact on growth.

Keywords: Economic Growth; Foreign Direct Investment; Personal Remittances; Official Development Investment (search for similar items in EconPapers)
JEL-codes: C33 E22 H54 O11 O47 (search for similar items in EconPapers)
Date: 2017
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