Examining the Asymmetric Impact of Foreign Direct Investment on Iran's Economic Growth Using the NARDL Model

Mostafa Samieenasab (), Alireza Zamani (), Ali Jodatvand () and Mohammad Kaveh Baghbadorani ()
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Mostafa Samieenasab: Associate Professor, Department of Economics, Imam Sadiq University, Tehran, Iran
Alireza Zamani: Master of Financial Management, Imam Sadeq University
Ali Jodatvand: Master's degree, Department of Economics, Imam Sadiq University, Tehran, Iran
Mohammad Kaveh Baghbadorani: Master's degree, Department of Economics, Imam Sadiq University, Tehran, Iran

Quarterly Journal of Applied Theories of Economics, 2025, vol. 11, issue 4, 33-66

Abstract: Economic growth and development are important economic goals for every country and have been the focus of economic planners for a long time. Therefore, with the formation and development of growth models in economic literature, the category of investment and capital provision has been placed in the focus of researchers and policymakers as one of the basic economic issues. This research aims to examine the asymmetric effects of foreign direct investment on economic growth in Iran by applying the nonlinear autoregressive distributed Lag (NARDL) and existing theories in this field, with seasonal data from 2001 to 2021. The research results show that the positive shock of foreign direct investment has a positive effect, and the negative shock of foreign direct investment has a negative and significant effect on economic growth in the long term. Also, the positive shock of the degree of trade openness has a positive effect, and the negative shock of the degree of trade openness has a negative and significant effect on economic growth in the long run. In addition, the results show that the balance of payments also has a positive and significant effect on economic growth in the long term. Finally, the results of the Wald test also show that the effects of foreign direct investment shocks and trade openness are asymmetric in both the short and long term

Keywords: Foreign direct investment; economic growth; Iran; NARDL (search for similar items in EconPapers)
JEL-codes: E22 F21 K23 (search for similar items in EconPapers)
Date: 2025
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