Effect of Fiscal Decentralization on the Attraction of FDI in Iran
From a financial perspective, decentralization is a transfer of resources from the central government to local governments. Fiscal decentralization policies can lead to more FDI attraction by increasing the share of provincial government funding to local infrastructure.Accordingly, the major purpose...
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| Format: | Article |
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Allameh Tabataba'i University Press
2019-06-01
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| Series: | فصلنامه پژوهشهای اقتصادی ایران |
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| Online Access: | https://ijer.atu.ac.ir/article_10888_468fd58654cd49d2df319edef433cca1.pdf |
| _version_ | 1827393209949487104 |
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| author | mohammad alizadeh Seyed Ehsan Hosseinidoust Abolghasem Golkhandan |
| author_facet | mohammad alizadeh Seyed Ehsan Hosseinidoust Abolghasem Golkhandan |
| author_sort | mohammad alizadeh |
| collection | DOAJ |
| description | From a financial perspective, decentralization is a transfer of resources from the central government to local governments. Fiscal decentralization policies can lead to more FDI attraction by increasing the share of provincial government funding to local infrastructure.Accordingly, the major purpose of this study is to evaluate the long run and short run impact of fiscal decentralization on FDI in Iran during the period 1992-2014. For this purpose the three indicators of fiscal decentralization of revenue, fiscal decentralization of expenditures, fiscal decentralization of autonomy power and also some control variables including inflation, exchange rate fluctuations, and degree of trade openness have been used.In order to estimate the model, the Johansen-Juselius method and Vector Error Correction Model (VECM) have been applied. Based on the results of the model, all three fiscal decentralization indicators increase FDI in the long run and in the short run. Therefore, providing the necessary conditions for the expansion of fiscal decentralization can help to promote the FDI level in Iran.Also, both in the long run and the short run, inflation and exchange rate fluctuations have a negative effect, and the degree of trade openness has a positive effect on FDI. |
| first_indexed | 2024-03-08T17:44:56Z |
| format | Article |
| id | doaj.art-718ce6180178486ea82188ae4af26a09 |
| institution | Directory Open Access Journal |
| issn | 1726-0728 2476-6445 |
| language | fas |
| last_indexed | 2024-03-08T17:44:56Z |
| publishDate | 2019-06-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | فصلنامه پژوهشهای اقتصادی ایران |
| spelling | doaj.art-718ce6180178486ea82188ae4af26a092024-01-02T10:29:33ZfasAllameh Tabataba'i University Pressفصلنامه پژوهشهای اقتصادی ایران1726-07282476-64452019-06-0124796710510.22054/ijer.2019.1088810888Effect of Fiscal Decentralization on the Attraction of FDI in Iranmohammad alizadeh0Seyed Ehsan Hosseinidoust1Abolghasem Golkhandan2Associate Professor, Faculty of Economics University of LorestanProfessor, Faculty of Economics and Administration, University of Boo-Ali Sina, HamedanPh.D. in Economics, Faculty of Economics and Administration, University of Lorestan, Khoram AbadFrom a financial perspective, decentralization is a transfer of resources from the central government to local governments. Fiscal decentralization policies can lead to more FDI attraction by increasing the share of provincial government funding to local infrastructure.Accordingly, the major purpose of this study is to evaluate the long run and short run impact of fiscal decentralization on FDI in Iran during the period 1992-2014. For this purpose the three indicators of fiscal decentralization of revenue, fiscal decentralization of expenditures, fiscal decentralization of autonomy power and also some control variables including inflation, exchange rate fluctuations, and degree of trade openness have been used.In order to estimate the model, the Johansen-Juselius method and Vector Error Correction Model (VECM) have been applied. Based on the results of the model, all three fiscal decentralization indicators increase FDI in the long run and in the short run. Therefore, providing the necessary conditions for the expansion of fiscal decentralization can help to promote the FDI level in Iran.Also, both in the long run and the short run, inflation and exchange rate fluctuations have a negative effect, and the degree of trade openness has a positive effect on FDI.https://ijer.atu.ac.ir/article_10888_468fd58654cd49d2df319edef433cca1.pdfforeign direct investmentfiscal decentralizationiranvector error correction model (vecm) |
| spellingShingle | mohammad alizadeh Seyed Ehsan Hosseinidoust Abolghasem Golkhandan Effect of Fiscal Decentralization on the Attraction of FDI in Iran فصلنامه پژوهشهای اقتصادی ایران foreign direct investment fiscal decentralization iran vector error correction model (vecm) |
| title | Effect of Fiscal Decentralization on the Attraction of FDI in Iran |
| title_full | Effect of Fiscal Decentralization on the Attraction of FDI in Iran |
| title_fullStr | Effect of Fiscal Decentralization on the Attraction of FDI in Iran |
| title_full_unstemmed | Effect of Fiscal Decentralization on the Attraction of FDI in Iran |
| title_short | Effect of Fiscal Decentralization on the Attraction of FDI in Iran |
| title_sort | effect of fiscal decentralization on the attraction of fdi in iran |
| topic | foreign direct investment fiscal decentralization iran vector error correction model (vecm) |
| url | https://ijer.atu.ac.ir/article_10888_468fd58654cd49d2df319edef433cca1.pdf |
| work_keys_str_mv | AT mohammadalizadeh effectoffiscaldecentralizationontheattractionoffdiiniran AT seyedehsanhosseinidoust effectoffiscaldecentralizationontheattractionoffdiiniran AT abolghasemgolkhandan effectoffiscaldecentralizationontheattractionoffdiiniran |