Journal of Economic Research
Year:2013 | Volume:47 | Issue:4|Papers Count:14

Network effects, increase in the value of consuming a product if many other consumers use the same product, is a feature of many markets of high-technology products. Frequently cited examples of products exhibiting network effects are telecommunication or software products. This research explores the role of network effects in the consumer's choice of mobile operator in Tehran. For our empirical analysis, we use three sources of data: the real volume of on-net calls and the real volume of off-net calls; expected volume of on-net calls and the expected volume of off-net calls by the market share of each operator; and the prices of off-net and on-net calls. We estimate a model that illustrates the role of network effects. The results show that the proportion of off-net calls reduces as mobile operators charge a premium for off-net calls. In addition, in the absence of any price differences between on-net and off-net calls, the net network effect is not recognized.

This paper presents a new index of financial stress which is constructed by macro data from different financial markets (including banking sector and also housing, foreign exchange and stock markets). The proposed approach has been applied to the Iranian economy based on the available quarterly time series, covering the period 1991 (1)-2008 (2). The paper explains how the selected components capture key aspects of financial stress. The regression of cyclical components technique and weighting by coefficients of determination is used as a weighting scheme. The results of the estimated growth model show that the constructed FSI provides valuable information about economic growth volatilities.

According to the recent literature, the expansion of intra-industry trade increases the intra-industrial excess job reallocation. Based on Lovely and Nelson (2002), this study examined the hypothesis that marginal intra-industry trade has a positive effect on the excess job reallocation in Iranian industries. Therefore, we have employed a panel technique for Iranian manufacturing industries at the 3-digit ISIC classification over the period 2002-2006. The results show that the expansion of marginal intra-industry trade increases the excess job reallocation that probably decreases the adjustment costs in industrial labour market. Therefore, we suggest that the government should pay more attention to intra-industry trade in order to control and reduce the adjustment costs of trade expansion and liberalization.

The study examines the relationship between the size of firms and their growth in Iranian food and beverages industries. The study utilizes Iranian industrial data, classified on the base of ISIC with 4-digit code. The study evaluates the validity of Gibrat's Law in the selected firms. The validity of the law has been examined by two methods. First, the panel analysis is applied and second, the existence of lognormal distribution of firm size has been tested. The results do not confirm the validity of the Law and indicate the fact that firm size is not log-normally distributed. The results show negative impact of firm size on the growth.

This study estimates the residential property prices in Tehran using hedonic price functions and Spatial Econometrics. The newly employed method is extending the analysis to the neighbourhood level (361 sectors) using the city's planning and GIS tools. The results show that the spatial econometric model has higher identification than the simple econometric model. The distance between the centre of city-sector and metro-station, which is a spatial variable, has a small significant negative coefficient (near to zero) in the model. In addition, proximity to a metro station has not had a large negative impact on residential property values and it can be said that it has been ineffective.

In this paper, the effect of trade openness on growth is examined across the members of Organization of the Islamic Conference (OIC) by using convergence-growth equation and GMM-System dynamic panel data estimator over the period 1980-2009. The results show that the overall trade, the trade with non-OIC countries, and the investment in physical and human capital stimulate economic growth. In contrast, intra-OIC trade, population growth, government consumption expenditure, instability, inflation, and export of primary goods are the obstacles to the OIC economic growth. According to the results, multilateral trade under preferential trade agreement between Iran and the other OIC countries will not provide considerable achievements for economic growth of Iran. In summary, the OIC members are experiencing the natural resource curse.

There are different studies in urban literature on the determinants of urban growth, from the theoretical and empirical points of view. The most completed theoretical model is Henderson model (1988, 1997, and 1999), which is tested by some empirical studies. As Henderson model shows, the set of national product, specialization and technological progress are the determinants of urban growth. Using this model, the paper investigates the urban growth of Iran over the period 1986-2006. The national product is divided into four groups including agriculture and mining; industry and construction; public, personal and distribution services; and information-based services. The specialized cities are determined based on the last three groups and the Henderson’s theorems are tested for them. Eventually, the effect of each type of specialization is tested on urban growth in Iran. The results demonstrate that specialization has positive effect on urban growth in Iran.

Forecasting of macroeconomic variables has specific importance in economic topics. Indeed, different models are invented to forecast variables to help economic policy makers in adopting appropriate monetary and fiscal policies. In this paper, the performance of integrated model of Input-Output (IO) and neural network is investigated in forecasting final demand and total production and the results are compared with IO model. At the first step, final demand is estimated by using mean of final demand rates over the period 1365-1375, and then total production is forecasted by using IO model. In the next step, two generalized feed forward neural networks are proposed to forecast final demand and total production of the year 1380. Finally, two models are compared and the hypothesis is evaluated by using MSE, RMSE, MAD, MAPE criteria. The results indicate that the integrated model of IO and neural network outperform IO model in forecasting total production.

This paper provides an empirical investigation on individual labour supply of Iranian spouses in an intra-household collective decision framework in which gender ratio plays a central role in the household’s resources allocation. The data set is taken from the socioeconomic characteristics of panel survey over the period 2001-2004 and ten yearly headcount of Iran. We have conducted the parameters estimation and hypothesis testing by generalized procedure of sample selection in a panel setting. Our findings evidence that females’ labour supply is affected by the gender ratio (total number of males over the females in the same provinces, both in the urban and rural areas) significantly and strongly. In addition, the own wage of couples drives spouse’s individual work hours positively, and the sign of cross wage effect is negative but less than the own wages’ coefficient in absolute value. These results are compatible with the theoretical expectations. Although the paper does not have any theoretical contributions, this is the first attempt and application of collective decision theory in Iranian economy.

In the recent economic literature, an important finding is the causal relationship between financial development and economic growth. Before the 1970s, the most of economists believed that economic growth could be reached only by accumulation of physical capital. In the 1970s and after the pioneering works of McKinon (1973) and Shaw (1973), this orthodox view was criticized by a vast amount of new theoretical and empirical researches.Regarding the importance of this issue and the fact that our country is highly involved in repressive financial and monetary policies, this paper investigates the effects of these policies on economic growth and development. Therefore, an indirect method is employed that estimates two sets of cointegration equations containing financial depth and GDP. The main finding of this paper is that financial repression impresses the economic growth through the negative effect on financial depth.

In recent decades, foreign direct investment (FDI) has played a vital role in economic growth of developed and developing countries. FDI brings new capital and technology to the host country beside a possibility of spillover to local firms. Hence, FDI is considered as an important channel of technology transfer. However, in empirical studies, the size and direction of effects of FDI on productivity of host country firms is in doubt. Furthermore, the absorptive capacity of domestic firms is also important in determining the direction and size of the spillover effect to the host country’s domestic firms.In this study, we examine spillover effects of FDI in a number of industry sub-sectors over the period 1997-2007, using a panel data model. Moreover, the human capital and R&D expenditures are considered as indicators of the absorptive capacity of the domestic firms.The results show that horizontal linkages between foreign and domestic firms reduce the productivity of domestic firms, while vertical linkages increase it. Gradual increase of human capital investment can reverse the negative effects of horizontal linkages.

This Paper estimates the determinants of inflation in Iran using a linear and non- linear regression model over the period 1959-2008. In the model specification, the conventional variables (liquidity, production and exchange rate) as well as positive and negative oil revenue shocks, monetary disequilibrium, and demand gap are considered. The results show that nonlinear time series regression model outperforms the linear model in explaining inflation in Iran. The model coefficients are functions of oil price. In the low oil income regime, positive oil shocks decrease the inflation rate while these shocks are not significant in the high oil income regime. Demand gap or excess demand does not have any significant effect on inflation when oil revenues decrease. But in oil boom periods, demand gap affects inflation significantly (probably through government expenditure).