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Financial markets play a vital role in supplying and facilitating the flow of funds into production and industry sectors of economy and can result into the acceleration of economic growth. Indeed, many experts believe that the development of financial markets acts as the engine for growth. The main objective of this paper is analyzing the relationships between financial market development and economic growth through focusing on Iranian economy and thirteen other countries for the period 1988-2003. In this regard in addition to the Beck and Levin model (2003), we have used three versions of Granger–Casualty approach, Cointegartion test and panel data estimation procedure. Casualty test shows that in Iran, bank and stock market size have no strong effect on economic growth despite the fact that the effect of economic growth on stock market is positive and meaningful. The results of panel data estimation revealed that in real terms, investment and labor force, positively and strongly affect economic growth. In the money sector, the effects of banking system are statistically acceptable, although the positive effect of stock market is not statistically acceptable. The absence of Long–run co integration relation between financial markets and economic growth for the period 1976-2003 is the result of Auto-Regressive Distributed Lag Estimation. In sum, the long – run relation between money market and economic growth is negative and this true for the Iranian economy.

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Based on the early theories of the foreign direct investment (FDI), trade and FDI are substitutes while the new international trade theories emphasize the complementary relationship between trade and FDI. This introduces new aspects to model fundamental concepts such as increasing returns to scale, product differentiation, and technology differences among countries. This paper is an empirical study of the interaction between trade and FDI using data on inward FDI to the ECO and D8 countries. To end this, we use instrumental variable and generalized two-stage least squares (G2SLS) techniques for panel data models. The results show that there is a complementary relationship between trade and FDI. Moreover, GDP, exchange rate, population, inflation, and some convergences variables have significantly influence on trade and FDI.

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Casual relationship between financial developments and economic growth is one of the striking empirical macroeconomic relationships. Following the development of financial issues, our attention turns from economic growth to another issue of economic welfare. In this study, we try to examine the relationship between financial developments, economic growth, poverty and inequality in OPEC countries. The simulation of the models and statistical inferences, in this study, are based on the static and dynamic panel data approach. The empirical models are estimated by using GMM estimators, fixed effects and random effects using the data between 1990 and 2004. The results of this study show that financial developments through its effect on economic growth can mainly contribute poverty alleviation and inequality reduction in these countries.

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The aim of this paper is twofold. It first investigates the demand for international reserves using panel data for 32 developing countries during the period 1975 – 2004. To this end, an Error Correction Model (ECM) approach is employed to estimate the empirical model and then a capital asset pricing model (CAMP) is used to determine the composition of the foreign exchange reserves. A dummy variable is included in the model to consider the effect of changing exchange rate system on the demand and the composition of international reserves. The results show that there is a negative relationship between exchange rate flexibility and the demand for international reserves.

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Economic development is one of the major policies of a country which is concerned to industry and technology on one hand and leads to environmental pollution on the other hand. The experiences of developed countries show that economic development with emphasis on the industry sector, without any attention to environment, can create serious problem against sustainable development. Industrialization has caused increasing energy consumption and therefore air pollution. It's so important to consider the relationship between industrial activities and industrial pollution in developing countries, because industry sector has a basic role in development process of these countries. Therefore the aim of this study is examining and qualifying of linkage between industrial activity and air pollution, using an industry-level dataset of IRAN manufacturing industries during the period 1995-2007. The result of study shows that air pollution is a positive function of energy consumption, industrial activity and physical capital intensity and also is a negative function of labor productivity, fuel price and human skill intensity.

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This paper aims to evaluate the relationship between exports diversification and productivity for nine Iranian manufacturing industries using a panel data approach. Empirical results indicate that productivity and exports have similar trends over the period considered in this study. Indicators such as capital-labor ratio in sub-sectors of the manufacturing and the real effective exchange rate have positive effects on productivity. Exports diversity index has also a positive and significant impact on productivity such that one percentage change in this index increases productivity by 1.8 percent. The effect of trade liberalization on manufacturing productivity is negative and negligible, implying that, to promote productivity, policymakers should consider other fundamental and institutional factors in addition to the foreign trade.

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This paper investigates the impact of exchange rate on non-oil export covering the period from 1978 to 2006. The method used in this study is Panel data, and these countries are selected as the hosts: Turkey, The United Arab Emirates, Saudi Arabia, Kuwait and Pakistan. In this research, Gross Domestic Product of the host country, Bilateral Exchange Rate, Price Raito and Dummy Variable are used as regressor for non-oil exports. The result of this study shows that, gross domestic product and exchange rate have positive effect, but price ratio and dummy variable have negative effect on non-oil exports of Iran to these countries. Also Cross Section Specific coefficient shows that exchange rate has positive effect on export to Turkey, The UAE and Pakistan, while negative effect on other countries.

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The convergence process and the advantages involved for less developed and developing countries, especially those located in the MENA region is of a great importance in economic studies. Through expanding regional co-operations and playing a wider role in the economies of the member states, it can prepare a suitable ground for growing regional markets and positive international economic reactions and finally can result into total development of the region. This article, using time series model is aiming at testing the convergence hypothesis in MENA region (15 countries) during 1980-2008. For analyzing time series model, we used Augmented Dicky Fuller test, Zivot & Andrews (with the endogenous time break) unit root test, Im, Pesaran & Shin and also Levin, Lin & Chu unit root panel data tests. The results of time series model with ADF and ZA tests show that there are two groups of convergence among the selected MENA countries. The first one is those countries which are converging from the low per capita income up to the average per capita income of the selected countries. The second one is the countries which are converging from the high per capita income down to the average of the region. The rest have diverged from the average per capita income during the period. According to Im, Pesaran & Shin and also Levin, Lin & Chu unit root tests, the convergence hypothesis of per capita income to average, is accepted for the whole sample. Altogether, the selected countries are minimizing the gap between their per capita income and the average per capita income of the region.

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Transfer of inheritance and accumulated savings to future generations as a factor affecting the income inequalities for the next generations and as a key variable in government expenses allocated to socio-economic services and social security has always been a controversial subject for research. In this study, using a panel data, in a structure based on traditional culture in Sistan and Baluchestan province, it is tried to determine how the households make decisions on inheritance and which social, economic and demographic factors have greater impact on such decisions in a dual urban life. For this purpose, firstly, the Altonji and Villanueva model or the "income-wealth derivative" was considered as a base framework. Then, with regard to the charitable behavior of the province households, some variables are set for the model. After that, the Data Panel for the years 2001-2006 with nearly 1600 tax cases are analyzed which are prepared through inheritance tax cases and personal visits. Then using the statistical software of STATA 9.1, data were analyzed. To determine the fixed and random effect, the Hausman test was also used. Finally, the results related to the scheme hypothesis are reviewed. Findings indicate a difference in behavior and some form of harmony respect to dual structures of each society. It means that, with improving the economic wellbeing in Zahedan city, inheritance increases, but in case of low-income societies, inheritance will decrease. In other words, Wagner theory, arguing per capita income growth from the perspective of citizens’ behavior within different structures and changes in income elasticity of goods for the households in terms of effects on the inheritance transfer model can be easily seen in different behavioral coefficients.

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Science and technology can have a major role in growth and creating value added of communities. Research and development are important economic issue that cause technological changes and therefore have a significant role in development of technology and increasing production capacities. Although recently developing countries have realized the importance of R&D, their production units are unable to invest more in R&D section. It is also believed that in the early stages of development, the existing technological gap between these countries and technology leaders decrease the success possibility of R&D efforts and as a result, these communities don’t have reasonable technological basis for innovation. So in the early stages of development, in addition to R&D efforts, import of capital goods can also be effective in developing technology and increasing production capacities of developing countries. In this study, the effect of internal R&D capital stock and external capital stock on value added of the Iranian medium and large industries is investigated over the period of 1994-2007 by applying panel data approach. The results indicate that internal and external capital stock, human capital and internal R&D capital stock have a significant and positive effect on added value of the Iranian medium and large industries during the mentioned period. The research findings have also revealed that although the number of labor force has a positive impact on added value of these industries, it is not statistically significant.  

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Self-employment is a crucially important subject in an economy, especially for a country with high unemployment rate. This paper studies the determinant factors of self employment in Iran during 1996-2006 using a panel data method. The results show that unemployment rate per province, the ratio of 15-65 age bracket to total population of the country, and the share of each province to total GDP aren't statically significant. While the ratio of urban population to total population for each province has a negative coefficient in self-employment equation, the ratio of R&D expenditure to GDP and literacy rate has a positive one.

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In recent decades, the new technologies have been thoroughly discussed to have great impacts on growth in economics literature. This study is aiming at investigating the impact of ICT and social welfare on economic growth. For this purpose, cross-provincial estimation was used by panel data from 2002 to 2006. The variables which are used in this research are per capita GDP, age indicator ICT investment, human capital and pe capita physical investment. The results show that social welfare and ICT have a positive and significant impact on economic growth in all provinces of the country.  

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According to trade theories, economic integration results in increasing trade and income among trade partners. This paper tries to test the major factors affecting the exports of agricultural products in ECO members using spatial econometric approach. For this purpose, the exports statistics of ECO members has been used in the form of panel data during 1992-2008. Agricultural exports function has been estimated using the Static (fixed and random effects) and Dynamic (generalized method of moments (GMM)) methods in panel data with classic and spatial econometric approaches. The estimated results indicate the existence of spatial dependence among the countries, so the using this estimation procedure is justified. GDP, Exchange rate and spatial variables (such as proximity) have positive effects and Population has negative effect on agricultural exports. Finally, it is suggested that the estimation equations should consider the proximity between the countries and with the increase in the exchange rate and GDP, increase exports in order to provide the necessary basis. Population control policies may also apply.

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Tax evasion linked to imports is a cause for forming informal economy. Tax evasion decreases government revenue and makes restrictions in implementing economic policies. This paper investigates relationship between the tariff rate and tax evasion at the six- digit HS level on trade data of Iran and its twelve major trading partners during 2003 to 2008.  According to Bhagwati method, Tax evasion is defined as the discrepancy between the value of imports, reported by Iran, and the value of exports to Iran, reported by its trading partners. The results from estimated tax evasion models show that there is positive and significant relationship between the trading discrepancies or tax evasion and tariff rates among 27917 products. The elasticity of tax evasion with respect to tariff rates is 0.67, i.e. each one-percentage-point increase in the tariff rates raises tax evasion by 0.67 percent in case of total products. Additionally, the elasticity of tax evasion with respect to tariff rates is 0.8 for goods having tariff rates above average. In this case, tax evasion is more likely. The positive impact of tariff rate on tax evasion is not verified for goods having tariff rates lower than average.

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In this paper, we analyze the determinants of Intra-Industry trade (IIT) between Iran and her trading partners, i.e. European :union:, ECO, GCC and ASEAN countries using dynamic panel data and GMM during 1997-2009. This study uses country-specific characteristics such as economic size, per capita income, foreign direct investment, geographical distance, and trade imbalance as explanatory variables. The results indicate that economic size, per capita income, and geographical distance explain most of IIT between Iran and her trading partners. According to econometric findings, the economic size has high and positive correlation with IIT, however per capita income affects negatively IIT. Thus, differences in aggregate demand and supply should be considered in selecting trade partners. The similarity in income structure leads to same demand structure and expansion of trade volume. In addition, geographical distance and trade imbalance has negative effect on IIT flow in Iran. 

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Population diversity, which is defined nationally as ethnic, cultural, religious, and tribal heterogeneities, is a key factor affecting regional economic growth. On one hand, It leads to disparity of preferences, discrimination, counter productivity policies and decreasing regional growth. On the other hand, ethnic and religious mix is of advantages including diversity in abilities, experiences, and cultures that may result in productivity, creativity, innovation and increasing regional economic growth. Thus, there is a trade-off between benefits and costs of heterogeneity of population in a diverse multiethnic society. A question arises here is that whether population diversity has positive or negative impact on regional economic growth? Moreover, what is the effect of population diversity on regional growth in Iran? This paper examines the effects of population diversity on regional economic growth, using Panel Data model for 28 provinces of Iran over the period 1999-2006. The results show that religious heterogeneity (Fragmentation index and Polarization index) has negative effect on regional economic growth in Iran.  

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During recent decades, decentralization has been regarded in various societies as an instrument for making public sector policies more efficient, and its numerous advantages and disadvantages have been discussed. Each decentralization policy has three dimensions including Political decentralization, Administrative decentralization and Fiscal decentralization. This paper evaluates the impact of fiscal decentralization on the interaction between economic growth and regional equity in the distribution of fiscal resources in provinces of Iran by using panel data method. The results verify a nonlinear relation between fiscal decentralization and economic growth, so that economic growth rises with fiscal decentralization increase to a specific level and then it decreases because of disadvantages of decentralization. There is a relationship between fiscal decentralization and equitable distribution of fiscal resources too. Growth and equitable distribution variables change in the opposite direction between two levels of decentralization, and move in the same direction out of this interval. There is also a tradeoff between growth and equitable distribution of fiscal resources.  

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Regarding the differences among firms on financial position and access to various financial resources, the selection of a proper variable, which represents actual cost of capital of a firm, is of great importance in explaining the firms demand for money.  In order to improve the estimation of interest rate elasticity of demand for money by manufacturing firms, this paper computes the cost of capital for each firm. Using firm level panel data for 161 manufacturing companies listed in Tehran Stock Exchange, the demand for money is estimated over the period 2000 to 2010. It is found that (a) the firms in which the cost of capital is higher, have low real balances; (b) the average cost of capital and its variations implies that the weight of cost of capital should be reexamined by monetary authority; and (c) the sensitivity of demand for money to fluctuations in wage  is more than to interest rate.

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The economic distance refers to the ease or difficulty for goods, services, labor, capital, information, and ideas to traverse space. This variable affects the regional economic growth through influencing location of firms, knowledge spillover and market size. This paper examines the effects of economic distance on regional economic growth by using Dynamic Panel Data model for 28 provinces of Iran over the period 2000-2009. The results show that economic distance has negative effect on regional economic growth.  

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Historically, the mankind has benefited from social capital in his collective life course implicitly and unconsciously. Nowadays, the concept of social capital has been included in the center of economy and community. The communities need to identify the framework of social capital and its consequences in order to overcome recession and deterioration. The relationship among socioeconomic indicators and social capital is one of the most important effects and interactions of social capital. In this article we try to identify the interaction between social capital and human development in the provinces of Iran. To do this, we use vector autoregressive panel data for the period 2000-2009. The results show that social capital has a positive effect on human development in the Iran’s provinces. On the other side, human development will generate social capital strata in the country.