IRANIAN JOURNAL OF APPLIED ECONOMICS
Year:2016 | Volume:5 | Issue:-|Papers Count:6

Foreign direct investment (FDI) is known as one of the important factors in enhancing economic interactions in the international area, which by transferring knowledge and technology to the host country increases production and thus boosts economic growth and development. Foreign investors look for a place with more economic security for gaining more profit and market development. Therefore, inflation volatility causes corruption incidence because of creating an uncertain environment. Uncertainty along with corruption in a country’s economy increases costs and reduces rate of investment return. The purpose of the present is to evaluate the uncertainty effect of inflation and corruption on attracting FDI in developing countries. First, Inflation uncertainty data is obtained by using the GARCH method, and then the impact of this uncertainty and corruption on FDI is evaluated in 12 selected countries by using the GMM model, during the years 2000 to 2012. Results indicate that corruption has a significant and negative effect on the model while inflation uncertainty and the second lag of FDI have a significant and positive effect on FDI, and "Hartmann (1972) and Abel (1983) " Hypothesis based on the positive impact of inflation uncertainty on investment is confirmed.

The studies conducted into Trade and Environment have not provided a definite answer to the effect of free trade on Environment, as some studies imply a positive effect of free trade on environment, whereas the others imply a negative effect. The Purpose of the present paper is studying the relationship between Trade and Environment in the selected countries of the world. Hence, this study, based on the theoretical principles, analyzes the validity of “Pollution Haven” and “Factor endowments” hypotheses by using the panel data for 77 countries from 1995 to 2013. The study of the “Pollution Haven” hypothesis implies countries with relatively weak environmental policies, as many of them have low per capita income, have an advantage in production of polluting industries. Based on the “Factor endowments” hypothesis can be declared that the environmental policies have little (or no) effect on the trade paradigm; while factors such as the differences between factors of production or trade technology, are the main determinant of relative advantage. Results show that the “Pollution Haven” and “Factor endowments” hypotheses cannot be accepted, and the Pollution emissions depend on other factors.

The important role of municipalities in the national economy is the implementation of cost management techniques and also, it is one of the main resistance economics ’ topics, so it would be necessary to measure the efficiency scores for municipalities in order to plan and better performance. Therefore, the present study estimates the cost efficiency of 95 municipalities in the Isfahan province and identifies the effective factors on it by stochastic frontier analysis approach and applying maximum likelihood method. And, the Battese and Coelli Model (1995) is used. Results indicate that the elasticity of total cost to the municipalities’ outputs is elastic and the elasticity of total cost to the price-hectares change in each tasks of municipal services, administrative services and civil constructional services, is inelastic. On the other hand, the cost efficiency of Isfahan province municipalities has a direct relationship with the ratio of current cost to total cost and with the ratio of total salary cost to total income and has a negative relationship with education. The average cost efficiency scores for Isfahan province municipalities is 66.44 percent during the period 2009-2011 (1390-1388 corresponding to Iranian calendar).

Substitution phenomenon usually occurs when the citizens lose their confidence to domestic currency especially for money as a store of value. It seems to be the most important concern in the present Iran economy status is inflation and increase exchange rate and hence, keeping the dollar and other currencies instead of domestic currency has gained common. Accordingly, the present study examines the phenomenon of currency substitution in Iran. Therefore, annual data for the period 1979-2013 (1358- 1392 Corresponding to Iranian calendar) are used to estimate the demand for money applying Auto Regressive with Distributed Lags (ARDL) method. The findings indicate that the GDP has direct effect on the demand for money and inflation variables, exchange rate (price per unit of foreign currency in terms of domestic currency) and volatility exchange rate has an adverse effect on the demand for money, so that the negative exchange rate coefficient confirms the existence of the phenomenon of currency substitution in Iran. Also CUSUMSQ and CUSUM test prove that the money demand function is completely stable in Iran.

Stock Exchange is considered as the pulse of the economy. Having a dynamic and fast-growing stock exchange would help economic development. Usually several aspects of stock exchanges are studied both from the domestic and international side. The effects of the domestic good news and bad news and international shocks and volatility as effective factors are influencing stock exchange rate of return. In the present study, the effects of good and bad news and international shocks and volatility on Tehran stock exchange index, are estimated by applying multivariate and univariate GARCH models, and using index data of Tehran, Istanbul and Dubai stock exchange, during the period April 2011 to April 2014 (Farvardin 1390 to Farvardin 1393, corresponding to Iranian calendar).Results imply that good news and bad news, shocks and fluctuations of Dubai financial market, have a significant effect on Tehran stock exchange index.

In the present paper, the impact of total-factor productivity (TFP) growth in Iran’s agricultural sector on its value added and export growth is examined using Johnson’s Integration Technique and Vector Error Correction Model (VECM) during the years 1976 to 2014. The Ordinary Least Squares Method is used to estimating the mentioned productivity and in order to eliciting the long-term relationships, with respect to the same degree of variables integration, Johnson’s method is used. In this study the effects of the other variables shock on the dependent variable are examined via the impulse response functions and the Vector Error Correction Model is estimated. Findings show that in the long term all variables including agricultural sector value added and exports have significant effects and correspond with the theoretical expectations. In addition, the result of analysis of the impulse response functions show that the TFP shock and trade liberalization have positive effects on agriculture sector exports and value added. The estimated error correction coefficient is also significant and it is negative as expected.