Financial Economics
Year:2016 | Volume:10 | Issue:35|Papers Count:8

This paper aims to answer the question of whether expansionary fiscal policy (increasing government spending and tax cuts) on economic growth in Iran is in linear or non-linear effects? On this purpose, the performance of each of these programs using both linear and threshold vector autoregressive model and the data years 1338 to 1391 is investigated. In this connection, when using the threshold model, the studied period observations based on positive or negative output gap was divided into two regimes. Impulse response functions results from the linear model indicate that reduced tax revenues and increased government spending as fiscal stimulus have led to increasing economic growth, but the impact of government spending is greater than tax revenues. Increasing government spending is most effective in threshold model, also. In addition, comparison of Impulse response functions from linear and threshold model show that response of GDP to tax revenues in linear model and positive output gap are almost identical. However, the effect of increasing government spending on GDP in linear model is very different from high regime. GDP response to tax revenues and government spending in lower regime is also different from the linear model. Accordingly, the expansionary fiscal policies multipliers are dependent on economic conditions in terms of the output gap.

As economic growth affects financial market and financial institutions, financial depth has an impact on economic growth too. Given the remarkable role of financial depth on growth, determination of developed financial market role in decreasment economic volatility is important which has attracted little attention so far. Accordingly current study paper examines the impact of financial depth on growth volatility by using the time series data over the period 1370-1389 for Iran with the GMM methodology.The results of the evaluation indicate that there consist a U-shaped relationship between financial depth and macroeconomic volatility.in the other words financial depth plays a significant role in dampening the macroeconomic volatility, but only up to a certain point and after wards rising financial depth results in macroeconomic volatility increasment and economic growth decreasment.Besides three variable such as inflation, volatility of Exchange rate and openness index defined as effective variables on macroeconomic volatility. Results shows that in inflation condition macroeconomic volatility will decrease in long term. also volatility of Exchange rate increase the macroeconomic volatility and in case of the relationship between trade openness and macroeconomic volatility it has no any reliable dependency yet.

Income’s taxes play a crucial role in government revenue in long- term. The Companies are always trying to pay less tax because of pursuing more profit. Tax avoidance, a policy adopted by many firms in developing countries has seen as tax incentive. The present study evaluated the relationship between the transparency of financial reporting and tax avoidance based on institutional ownership in 82 companies listed in Tehran Stock Exchange during 2007-2013. Based on the fuzzy regression estimation there is a significant inverse relationship between transparency of financial reporting (disclosure quality and transparency of profit) and tax avoidance (effective tax expense rate and booktax differences). This relationship was stronger in companies with low institutional ownership than in those with high institutional ownership. This finding means that, tax planning activities, the transparency of financial reporting decreases, while the impact of institutional ownership level of transparency on the relationship between financial reporting and tax avoidance has founded inverse relationship unexpectedly.

In the literature, it is emphasized on the role of government spending in business cycle of economic activities, especially in the developing countries where public investment alongside with other government tools uses for economic growth stimulation. However, the effect of government spending depends on how the spending is financed.Oil in the Iranian economy plays a significant role, so that more than 45% of the budget is directly financed by oil revenue. Therefore, oil plays a major role in macroeconomic variables fluctuations.The aim of this paper is that while explaining the business cycle behavior of the oil income, its relation with some relevant macroeconomic variables including government expenditures, investment, growth, inflation and money is examined as well. To end this, we use a new Keynesian dynamic stochastic general equilibrium (DSGE) model to explain the transmission channels of oil revenues effect on macroeconomic variables through the government budget, public capital stock and monetary base channels.

Hyrocarbonic product including Oil & Gas export revenues play a central role in economy, social & political stability as well as the security of exporting countries. These nations are mainly categorized as developing countries and are heavily dependent on capital, management & the advance trchnology of Oil majors for exploitation of their underground reserves.On the other side the foreign Oil companies (FOCs) require security and a promising long term profit to secure any investment in host countries.These two groups mainly come together and enter in to agreement within what we refer to as Oil & Gas contracts in which the parties stipulate and agree on all the terms and conditions as well as their financial expectations thereof.Factors such as restrictions posed by legal systems, public’s historical background, economical and political status of the nation a long with several others may motivate or discourage a country as to adopt or avoid a certain type of contract.Adopting a certain type of contract may in long run affect the outcomes drastically either towards or against interests of host countries. This research, after analyzing, various finance project types conventional in Oil & Gas industry, comparing their merits and pitfalls and reviewing criticisms; aims at proposing apprpaiate options for Iran.Using the Analytical Hierachy Process (AHP), this research compares Buy-back, Concession and Production Sharing Contracts (PSC) together to find the optimum contractual method in finance and project implemention in oil upstream section for both independent and Iranian joint fields. the most important decision-making criteria for making contract in upstream section for oil and gas industry are classified to “Befor” and “After” contract approval. the criteria were selected by Delphi method. To do this research, two questioners were filled out by professionals in oil industry in two stages and the data was analyzed by EC software. The analysis of data indicates that the Buyback are preferable than PSCs and Concession contracts in independent fields (63.4%) and the PSCs are preferable than Buy-back and Concession contracts in joint fields (49%).

Inflation imposes welfare costs through reduction of value of financial assets and it damages production by creating uncertainty in institutions’ decision for investment and imposing other costs. Inflation, in fact, leads to non-optimal resource allocation, economic inefficiency, and disarray in the social, cultural, and political condition of the society. Unemployment, like inflation, causes disarray in the society. Unemployed people appear as parasites in the society and play no part in production and social services. Moreover, unemployment causes people to be trapped in issues such as crime, addiction and moral corruption which leads to the disruption of the society’s cultural texture. Inflation and unemployment are two major social issues. The harmful effects of these two social issues are such that the “Misery Index” is often calculated as the sum of inflation and unemployment rates. In this regard, the main objective of this paper is to analyze the effect of financial markets on the misery index in a group of selected countries with average income in the 2003-2014 period. Results from model estimation by the method of Generalized Method of Moments (GMM) show that: · The trade volume to transaction volume ratio in a stock market (as an indicator of the capital market) has no effect on the misery index in the group of selected countries.· Domestic credit to private sector by banks (as an indicator of the money market) has a negative and meaningful effect on misery index in the group of selected countries.

Electronic banking is a result of entering information and communication technology in the field of banking that led to reduced bank’s and costumer's costs. Use of electronic banking instruments such as automated teller machine (ATM) and point of sales (POS) has released delivery of banking services from the liabilities of time and location and affect the profitability of banks. This study has investigated the effect of electronic banking expansion on return on equity (ROE) in eight banks in the Tehran Stock Exchange included four private banks (Eghtesad novin, Parsian, Pasargad, Sina) and for state-owned banks that has been transferred their shares to the Stock Exchange (Saderat, Mellat, Tejarat, Post bank); in period of 1385-1393. Based on Generalized Least Square (GLS) approach and panel data method we found a significant positive effects between ROE and independent variables such as ATM/Branch, SPOS, HHI and GDP.

The aims of this paper is to investigate the effect of macroeconomic variables on the stock market returns in the energy sector (chemical and petrochemical) during 2002-2012 with panel data models. The influences of liquidity, inflation, exchange rates, energy prices, and financial variables of firms, such as debt structure, asset and returns conditions have been tested in the chemical & petrochemical companies in Tehran Stock Exchange. The findings show that the mentioned macro-variables have deeper effect in chemical firms rather than petrochemical firms, due to different elasticity of their products. Further achievements reveal that macro-variables have been more effective than intrafirms variables in selected sample. The return of these firms is also affected by several factors including sanctions, fluctuation in exchange rate, required importing inputs, export barriers, the higher cost of producing of petrochemical products compared to other countries, lack of diversification, and crude selling.