IRANIAN ECONOMIC REVIEW
Year:2025 | Volume:29 | Issue:2|Papers Count:15

The Iranian stock market has recently fluctuated sharply; at constant prices, it increased 7.3 times from March 2019 to August 2020 but decreased to less than half the following year. The inflation rate also increased sharply. So, the question arose as to whether the stock market value, as a wealth, through an indirect channel of consumption (wealth), is one of the factors increasing inflation. This study used a structural equation model to investigate this issue using monthly data from 2016 to 2021 by studying two equations of consumption and inflation. Results show that although the stock market value is not one factor that affects consumption, GDP growth and housing, as well as wealth, are significant factors in consumption. Therefore, the stock market value through the indirect channel does not lead to inflation. In addition, the stock market value does not affect inflation directly. But Money growth and Exchange rate are the most crucial factors affecting inflation, and GDP growth has slowed inflation in Iran.

Depending on the amount and scope of the sanctions, the application of international sanctions to various countries can have a variety of environmental effects. Sanctions exert pressure on the environment for a variety of reasons, including making it difficult to access technology, destabilizing investment conditions in the field of enhancing productivity and advancing technology, and limiting the government’s ability to protect the environment. In this article, we investigate the impact of sanctions on the environment of sanctioned countries. We use the ecological footprint index as a comprehensive index to measure the amount of pressure on the environment and its destruction, and we seek an answer to the question of whether unilateral, multilateral, American, European, United Nations, economic, and non-economic international sanctions increase the intensity of the ecological footprint. In order to assess the research’s hypothesis, data from twenty countries subject to sanctions between 1992 and 2018 are utilized. The findings of this study indicate that various intensities of international sanctions have a direct correlation with the ecological footprint index.

Researches show that knowledge-based capital (KBC) plays a significant role in modern economies, with this non-tangible type of capital being the greatest form of business investment and a major contributor to economic growth in advanced economies. Despite its importance as an important driver of economic growth, there are not enough researches that focus on the role of KBC in developing countries, so this paper aims to examine the relationship between KBC and Output per worker in Iran’s manufacturing sector. To achieve this, we utilized a two-step estimation method; in the first step, we estimated KBC as a latent variable in the Iranian manufacturing sector using exploratory factor analysis. In the second step, we examined the relationship between KBC and Output per worker in Iran’s manufacturing sector using a panel data regression analysis. Our findings indicate that KBC plays no significant role in Iran’s manufacturing sector. A probable explanation of lower level of complexity in manufacturing sector of Iran is that the sector is not enough developed to need such factors to produce innovative and knowledge-based products, so, the knowledge-based capital has not a significant role in that. In another words, the manufacturing sector in Iran is yet equipment based and more relies on primary materials rather than high level knowledge-based factors.

Consisting of 70.50% of the world's GDP and 58.37% of the world's population, countries participating in the G-20 have the potential to be a very profitable export market for Indonesia’s plantation commodities. However, the value of Indonesia's plantation commodity exports to countries in the G-20 tends to fluctuate and has even declined during certain periods. So, this paper aims to analyze the determinants, efficiency, and potential of Indonesia's plantation commodity exports to G-20 countries for the 2005-2020 period. The Stochastic Frontier Gravity Model (SFGM) and Random Effect (RE) models are estimated simultaneously to ensure the robustness of the results. Model estimates show that the GDP of exporters, GDP of importers, GDP per capita of importers, and population of importers have a positive effect on the flow of trade in Indonesian plantation commodities to countries in the G-20. Conversely, trade costs have a negative impact on Indonesia's plantation commodity exports. Another finding is that Indonesia's plantation commodity exports to countries in the G-20 have not been efficient with an average efficiency value of 52.45%. The implication is that there are still untapped opportunities to increase exports. Based on the calculation of export potential, the trading partner countries with the largest export potential are the United States (US$ 1,020.586 million), China (US$ 462.557 million), Japan (US$ 219.557 million), and Brazil (US$ 111.339 million). Based on the results, efforts to maximize Indonesia's plantation commodity export potential should be focused on countries with large economies and populations, and low trade costs.

In recent decades, the destruction of the environment and the emission of greenhouse gases such as CO2 has become a national and transnational crisis for many governments worldwide. In this respect, information and communication technology (ICT) and its increasing growth in these years have given governments an appropriate opportunity to implement and expand e-government and to create a chain of changes in governance and macro-management. Also, by providing efficient electronic services, they can better deal with the existing challenges and play a more effective role in improving society’s environmental quality and welfare. The present research investigates the relationship between the development of e-government and CO2 emissions in the Middle East and North African countries (MENA) between 2007 and 2022, using the GMM approach. The obtained results show that the development of e-government has had a negative and significant impact on CO2 emissions in the mentioned countries. Moreover, the results affirmed the EKC hypothesis in the MENA countries since economic growth is positively linked to CO2 emissions. In contrast, the economic growth square is linked negatively to the environmental degradation indicator. Furthermore, per capita energy consumption, industry development, and urbanization positively affect CO2 emissions, and trade openness has statistically insignificant effects on CO2 emissions. Thus, the authorities in this group of countries must take necessary measures to reduce carbon dioxide emissions and help improve environmental quality by implementing and improving electronic government as much as possible.

Financial technology (fintech) has emerged as a transformative tool for promoting financial inclusion and enhancing financial literacy, particularly among the millennial generation. This study investigates the impact of fintech—specifically its dimensions of knowledge, usage, and accessibility—on the financial literacy of millennials in Aceh, Indonesia. Furthermore, the study examines whether gender and education level moderate these relationships. A quantitative approach was employed, utilizing both Structural Equation Modeling (SEM) and Moderated Multiple Regression (MMR) to ensure robust analysis. The sample consisted of 328 millennial respondents, selected through purposive sampling. The findings reveal that fintech knowledge, usage, and accessibility each have a significant and positive effect on financial literacy. Additionally, both gender and education were found to moderate these relationships; however, the moderation did not differ significantly between male and female groups or across educational levels. This indicates that while gender and education enhance the strength of the relationship between fintech and financial literacy, their moderating effects are consistent across groups. These results suggest the need for inclusive financial education strategies that cater to all demographic segments. Financial institutions and policymakers should focus on increasing access to fintech tools and strengthening financial literacy programs without bias toward gender or educational background. Future studies are encouraged to replicate this research in other regions and to explore additional moderating variables that may influence fintech adoption and financial capability among youth.

The financial and real sectors are intrinsically related and the financial sector is affected by the systematic risks of the real sector. So, this study was done to investigate the reaction of the financial conditions index to the macroeconomic variables shocks in Iran with the time-varying parameter factor-augmented vector autoregressive model (TVP-FAVAR) and using quarterly data from 1991 to 2019. The results show that the macroeconomic variables shocks are an important factor in explaining the behavioral changes of the financial conditions index. In other words, the financial conditions index has shown different reactions to the macroeconomic variables shocks over time, and the intensity and extent of this reaction have not been the same for each of the macroeconomic variables. Therefore, policymakers should adopt appropriate policies according to the effects of macro variables on the economy so that they can ultimately improve the financial conditions of the country.

The recent financial development has witnessed the interest of many researchers and specialists in the field of Islamic finance due to the financial services and tools it provides that support the economy. Sukuk are one of the most important products of the Islamic financial industry because of their use in generating savings and raising funds to finance infrastructure projects and meet the requirements of economic development. The study aims to clarify the impact of indicators of financial development on the issuance of instruments in Indonesia between 2005 and 2021. To study the statistical relationship between the study variables, the issuances of instruments were relied upon as a dependent variable and the indicators of financial development as independent variables. (Real interest rate, private sector loans, money supply, investments) based on daddy growth of distruted time gaps, the resultats have demonstrated a morally positive impact for both private sector loans (DCPS) and Money Supply (M2) on SIs in the short term, and there is a moral positive impact for both investment (INV) and loans to the private sector (DCPS) on long-term issuances of instruments (SI). Finally, There is also stability in long and short-term milestones and therefore structural stability in the study model and the data used in the study do not have any structural changes, the study recommended the need to broaden the scope of instruments to ensure their dissemination and to look for factors promoting their development, to follow up on change in the financial system and to study their impact on the issuances of Islamic instruments in Indonesia.

Different factors contribute to the assessment of monetary damage, whose ignoring results in an inaccurate evaluation of monetary damage. One such factor is the approach used to calculate monetary damages. Concrete and abstract methods of calculation, namely, have been adopted for this purpose. Applying one of the aforementioned methods may result in no monetary compensation for the aggrieved party, whereas the other method may result in substantial monetary damages. Articles 75 and 76 of the United Nations Convention on Contracts for the International Sale of Goods 1980 Vienna (CISG) have embraced both of these methods. Nonetheless, the Convention does not specify the priority or prerequisites for applying these methods, which has led the tribunal to employ them arbitrarily. A circumstance that not only renders the rights of the aggrieved party unpredictable, but also causes inconsistency in the application of the Convention. This article is descriptive and analytical, which analyzes these methods and their application conditions, and concludes that the concrete method for calculating monetary damages has precedence over the abstract method. When the abstract method’s prerequisites are not met, it is utilized.

This study presents empirical findings on the relationship between financial performance and economic growth for Golf Cooperation countries panel generalized method of moments (GMM) between 2000 and 2019. The results show that banking performance, human capital, investment, trade openness, and inflation have significant positive impacts on economic growth. Robustness tests support the main findings. The relationship between banking performance and trade openness also contributes to economic growth. The study emphasizes the importance of effective banking performance, human capital, investment, and trade openness for long-term economic growth. The findings are relevant for policymakers and practitioners in the Gulf Cooperation Council countries.

The effect of consumer perception toward home financing can be influenced by various factors, and one potential moderating factor is religious belief. Religious beliefs and values can significantly shape individuals' perceptions, attitudes, and behaviours, including their approach to financial matters such as home financing. This study objective to empirically test the role of religious believe for home financing selection. It also aims to investigate the effect of consumer perceptions (price, location, and service) toward home financing selection with sharia scheme moderated religious belief. The research method used is a questionnaire survey and structural equation modelling with moderation analysis by using software, namely SmartPLS03 in order to run the data about 325 respondents from consumer who buy house and used sharia scheme developer financing and Islamic banking. The result of the study reveals that price and location affect the home financing selection with sharia scheme, while service and religious belief are not significant or have no direct effect. Other finding also reveals that religious belief can strengthen the effect of price toward home financing selection with sharia scheme. It is also found that the key findings of religious belief has an effect toward the home financing selection with sharia scheme not direct effect but with indirect effect through strengthen price influenced, thus, a comprehensive view of the relationship between price, location, religious belief, and the home financing selection with sharia scheme is presented and become the baseline study for introducing essential factors of religious belief to ensure the growth of Islamic Banking financing.

In the face of insufficient energy production in power systems, load shedding in residential areas has become unavoidable. This study evaluates the willingness to pay (WTP) among households in Kerman, Iran, to prevent power outages. A survey of 800 households was conducted in May 2021 using a one-and-one-half-bound dichotomous choice (OOHB-DC) approach, integrated with a spike model to address zero WTP responses. The questionnaire was designed to clearly communicate the study’s purpose, ensuring meaningful responses. Particle swarm optimization (PSO) was employed to estimate model parameters. Findings indicate that the average monthly WTP per household is 92,886 Rials (USD 0.37), with an annual aggregate value of 972 billion Rials (USD 3.89 million). These results, which are statistically significant, suggest that substantial investments are needed by utility providers to maintain reliable power supply in residential areas.

In the city of Tehran, factors such as the high value of land and rising prices have prevented the expansion of urban green spaces and kept green space per capita at a low level in comparison to international standards, leading to an increase in the need for citizens to have a place to rest and relax. Accordingly, creating vertical green spaces, such as walls and green roofs, plays a significant role. Therefore, introducing the functions and explaining the value of the economic and environmental benefits of developing such spaces is a necessity that can pave the way for the expansion of investment in this area. In this regard, the present study aims to assess the economic justification of green roofing in Tehran. Considering the two criteria of air pollution and green space per capita, district 2 of the municipality was selected, which is a host to a variety of social and economic classes. The discrete choice experiment (DCE) method was used to determine the economic value of green roof environmental services. In addition, the net present value (NPV), internal rate of return (IRR), and benefit‒cost ratio (BCR) indices were utilized for cost‒benefit analysis (CBA) of green roofing. Based on the results, citizens were willing to pay an average of 182.1 $/m2 to enjoy the aesthetic and environmental benefits of green roofs. Moreover, green roofing in the study area was economically justifiable, so that the average IRR was 44% and NPV was $187 during 2020. However, the IRR increased by 175% to an average of 121% considering the environmental benefits of this technology, and the NPV grew by approximately 388% to $914.

Although extensive research has been conducted on the impact of microfinance on poverty reduction, limited studies exist on the effect of charitable loans (interest-free or Qard al-Hasan) as an Islamic microfinance tool, primarily due to a lack of data. This article addresses this gap by employing a micro-data econometric model to investigate whether charitable loans have effectively reduced poverty among Iranian households. The study utilizes comprehensive data from 36 official financial institutions in Iran, including two specialized Qard al-Hasan banks - Resalat and Mehr of Iran - as well as data from numerous voluntary informal charity funds. Additionally, it incorporates household budget data from a large sample. The findings, derived from 24 distinct models, indicate that charitable loans significantly enhanced the spending power of poor urban and rural households, thereby having a positive and substantial impact on poverty reduction in Iran. Therefore, it is appropriate for the government to implement policies to expand them.

This paper considers 5 large stocks for retail investors and 14 stocks that cover almost the entire market for institutional investors to build an indexed portfolio. This research uses a constrained regression approach to build this portfolio for a 1-year and 2-year period, taking into account real-world constraints including transaction costs, asset turnover in the portfolio, and weight constraints. First, the companies under study are introduced, and then their performance over the entire period is examined. Second, the portfolio weights are updated in 21-day periods for one year and two years. Third, a t-test is run to statistically evaluate the performance of this portfolio with the overall index. The results show that in the two-year and one-year periods, these portfolios have statistically significantly outperformed the overall index. It seems that by balancing the portfolio weights in a periodic manner, one can achieve better performance than the overall index. Therefore, this approach can be suitable for retail and institutional investors.