The Role of Foreign Direct Investment in Iran's Economy Using the Computable General Equilibrium Model

Document Type : Research Paper

Author

Assistant Professor of Economics, Shahid Bahonar University of Kerman

10.29252/jep.9.18.65

Abstract

The use of know-how and the financial capability of foreign countries is one of the ways of achieving economic development. This can be realized through FDI. This is a tool that seems crucial for developed and developing countries. Using the CGE approach in terms of four scenarios, we investigatedthe effects of foreign direct investment on the Iranian economy. Scenario 1 suggests an increase of 100% in FDI and an  increase of 5% in TFP (in all sectors). Scenario 2 refers to an increase of 100% in FDI. Scenario 3 points to an increase of 100% in FDI and a decrease of 5% in TFP. Finally, Scenario 4 suggests an imbalanced increase in FDI in economic sectors. The results of Scenario 1 show an increase in production, imports and exports but a decrease of prices in all economic sectors. As the macro level GDP and exports increase, CPI is decreased. The findings of the second and fourth scenarios show a relatively low reaction in all economic variables at both sectoral and macro levels. The results of Scenario 3 show that production، imports and exports are decreased while prices are increased in all economic sectors. In General, the evidence suggests that, if FDI is associated with improved productivity, economic benefits would be higher.

Keywords

Main Subjects


  1. الف) منابع و مآخذ فارسی

    1. امین رشتی، نارسیس. و معرفتی، رقیه (1391). "اثر سرمایه‌گذاری مستقیم خارجی بر عملکرد زیست‌محیطی در کشورهای منتخب". مجله علوم اقتصادی 6(21): 205-183.
    2. شاه آبادی، ابوالفضل. ولی نیا، سید آرش. و انصاری، زهرا (1391). "تاثیر سرریز فناوری ناشی از سرمایه‌گذاری مستقیم خارجی بر عملکرد بخش صنعت". نشریه رشد فناوری 9(33): 25-13.
    3. مرزبان، حسین. و نجاتی، مهدی (1391). "اثر سرریز سرمایه‌گذاری مستقیم خارجی و نقش قابلیت جذب بنگاه‌های داخلی در بخش صنعت: مورد ایران (1386-1376)". تحقیقات اقتصادی 47(4): 219-201.
    4. مرزبان، حسین. و نجاتی، مهدی (1391). "ارزیابی اثر ناشی از سرریز سرمایه‌گذاری مستقیم خارجی بخش صنعت، بر اقتصاد ایران با استفاده از یک مدل تعادل عمومی". مطالعات اقتصادی کاربردی 1(4): 180-151.
    5. مطیعی، محسن (1390). "تاثیر سرریز‌های سرمایه‌‌گذاری مستقیم خارجی (FDI) بر نوآوری در کشورهای در حال توسعه". پژوهش‌های رشد و توسعه اقتصادی 1(2): 69-41.
    6. مهدوی، ابوالقاسم (1383). "تحلیلی بر نقش سرمایه‌گذاری خارجی در رشد اقتصادی". مجله تحقیقات اقتصادی 39(3): 208-181.
    7. نجارزاده، رضا. و ملکی، مهران (1384). "بررسی تاثیر سرمایه‌گذاری مستقیم خارجی بر رشد اقتصادی با تاکید بر کشورهای صادرکننده نفت". فصلنامه پژوهش‌های اقتصادی ایران 7(23): 163-147.
    8. هادی زنوز، بهروز. و کمالی دهکردی، پروانه (1388). "اثر FDI بر رشد اقتصادی کشورهای میزبان منتخب". فصلنامه پژوهشهای اقتصادی ایران 13(39): 136-113.

    ب) منابع و مآخذ لاتین

    1. Aitken, B. J. and Harrison, A. E. (1999). "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela". American Economic Review 89: 605–618.
    2. Arbenser, Lawrence (2008). "A General Equilibrium Analysis of the Impact of Inward FDI on Ghana: The Role of Complementary Policies". Working Papers Series Humboldt University Berlin, Institute for Agricultural Economics and Social Sciences, No. 69.
    3. Armington, P. S. (1969). "A Theory of Demand for Products Distinguished by Place ofProduction". International Monetary Fund Staff Papers IMF, Washington DC.
    4. Barry, Michael. P. (2009). "Foreign Direct Investments in Central Asian Energy: A CGE Model". Eurasian Journal of Business and Economics 2: 35-54.
    5. Coe, D. & Helpman, E. (1995). "International R&D Spillovers". European Economic Review 39: 859–887.
    6. Crespo, N. & Fontoura, M. (2007a). "Determinant Factors of FDI Spillovers – What Do We Really Know?". World Development 35(3): 410-425.
    7. Das, S. (1987). "Externalities and Technology Transfer through Multinational Corporations: A Theoretical Analysis". Journal of International Economics 22: 171-182.
    8. Dee, P. & Hanslow, K. (2000). "Multilateral Liberalisation of Services Trade". Staff Research Paper Productivity Commission, Canberra.
    9. Fosfuri, A. Motta, M. & Ronde, T. (2001). "Foreign Direct Investment and Spillovers through Workers’ Mobility". Journal of International Economics 53(1): 205-222.
    10. Glass, A. & Saggi, K. (2002). "Multinational Firms and Technology Transfer". Scandinavian Journal of Economics 104(4): 495-513.
    11. Hertel, T. W. (1997). Global Trade Analysis: Modeling and Applications, Cambridge, MA, Cambridge University Press.
    12. Jenkins, C. & Thomas, L. (2002). "Foreign Direct Investment in Southern Africa: Determinants, Characteristics and Implications for Economic Growth and Poverty Alleviation". Globalization and Poverty Project. University of Oxford.
    13. Lakatos, C. & Fukui, T. (2014). "The Liberalization of Retail Services in India".World Development 59: 327-340.
    14. Lattorre, M. C., Bajo-Rubio, O. & Gomez-Plana, A. G. (2009). "The Effects of Multinationals on Host Economies: A CGE Approach". Economic Modeling 26: 851-864.
    15.   .Latorre, C. M. & Hosoe, N. (2016). "The Role of Japanese FDI in China". Journal of Policy Modeling in press. .
    16. Latorre, C. Maria (2016). "A CGE Analysis of the Impact of Foreign Direct Investment and Tariff Reform on Female and Male Workers in Tanzania". World Development 77: 346-366.
    17. Lejour, A. Rojas-Romagosa, H. & Verweij, G. (2008). "Opening Services Markets within Europe: Modeling Foreign Establishments in a CGE Framework". Economic Modeling 25: 1022-1039.
    18. Lipsey, Robert. E. (2001). "Foreign Direct Investors in Three Financial Crises". NBER Working No. 8084.
    19. Loungani, P. & Razin, A. (2001). "How Beneficial is Foreign Direct Investment for Developing Countries?". Finance and Development 38(2): 230-237.
    20. Moosa, I. A. (2002). Foreign Direct Investment: Theory, Evidence and Practice, UK, Palgrave Macmillan.
    21. OECD (2002). Foreign direct investment for development: Maximizing Benefits, Minimizing Costs, Paris, OECD Publications.
    22. Petri, P.A. (1997). "Foreign Direct Investment in a Computable General Equilibrium Framework". Paper Presented at the Conference Making APEC work: Economic challenges and policy alternatives. Keio University, Tokyo.
    23. Santikarn, M. (1981). Technologyy Transfer, Singapore University Press.
    24. Mohnen, P. (1994). "The Econometric Approach to R&D Externalities". Cahiers Derecherche du Departement Des Sciences Economiques De l'UQAM, No. 9408.
    25. Tian, X. (2010). "Managing FDI Technology Spillovers: A Challenge to TNCs in Emerging Markets". Journal of World Business 45: 276–284.
    26. Vissak, T. & Roolaht, T. (2005). "The Negative Impact of Foreign Direct Investment on the Estonian Economy". Problems of Economic Transition 48(2): 43–66.

    15.  Latorre, C. M. & Hosoe, N. (2016). "The Role of Japanese FDI in China". Journal of Policy Modeling in press.

    16.  Latorre, C. Maria (2016). "A CGE Analysis of the Impact of Foreign Direct Investment and Tariff Reform on Female and Male Workers in Tanzania". World Development 77: 346-366.