Exchange rate pass-through to price indices in Iran

One of the major challenges for monetary policy is to predict how exchange rate fluctuations affect inflation and price indices. Hence, the main objective of this study is to examine the exchange rate fluctuation in the price indices in Iran. This paper analyzes the effects of exchange rate fluctuations on price indices and other macroeconomic variables of Iran during the period of 2004-Q1 to 2018-Q4, using the framework of a recursive VAR model, drawing on Bernanke (1986) and Sims (1986).The results indicate that the transfer of exchange rate changes to price indices is imperfect, such that the exchange rate path through to consumer, producer, and import prices is from 14.68%, 15.55% and 18.22% in the first period increase to 51.78%, 53.15% and 88.14% in the 13th period. In addition, the results indicate that the exchange rate path-through decreases along the distribution chain, with the highest exchange rate passing through the import prices, producer prices and consumer prices, respectively. The result has interesting implications for Iran’s ability to attain an effective inflation-targeting regime. Monetary policy makers should curb exchange rate fluctuations by adopting appropriate exchange rate policies in order to minimize the uncertainty of the consumer price index. The study contributes to the literature by assessing the effect of changes in the exchange rate (the Iranian Rial vis-à-vis the US$) on prices using an updated time series from 2004 to 2018. It addresses the limitations of the previous studies, which found no strong relationship between the exchange rate and inflation rate in the Iranian context. One of these limitations was using the CPI, as the only price index

A cointegration analysis of tax evasion, corruption and entrepreneurship in OECD countries

This paper explores the long-run relationship among tax evasion, corruption and different stages of entrepreneurial activities for 31 OECD countries based on a series of annual data during the period of 2000–2010. The analysis was conducted using Dynamic Ordinary Least Squares (DOLS) and Fully Modified OLS (FMOLS) approaches. The results clearly suggest the existence of a statistically significant long-run relationship between Tax evasion, corruption and entrepreneurial activities. In addition, the findings reveal that (1) corruption has a negative impact on all three stages of entrepreneurial motivation, total entrepreneurship activity and established entrepreneurship, and (2) using the DOLS and FMOLS estimates, tax evasion has a negative effect on the TEA and established entrepreneurship, while it has a positive impact on the entrepreneurial motivation. Consequently, if entrepreneurship is one of the main drivers of economic growth, policymakers and the government should simultaneously adopt policies to combat corruption and reduce institutional weaknesses when trying to reduce tax evasion

Entrepreneurship Development. Is Financial Literacy Matter? A Literature Review

This paper investigates the role of financial literacy in entrepreneurship development. A comprehensive review of 79 articles reveals that financial literacy positively influences entrepreneurs' financial behavior. Proficiency in financial concepts enables better decision-making, essential for activities like cost tracking, revenue management, and investment assessment. The paper also offers recommendations for future research and suggests enhancing entrepreneurs' knowledge and financial literacy through school education as a means to foster entrepreneurship

The relationship between cash dividend and earnings growth of listed companies in Tehran stock exchange

Dividend policy is one of the most important financial decisions managers encounter. This study contributes to empirical studies examining the relationship between cash dividends and earnings growth of companies listed on the Tehran Stock Exchange during the period 2007-2020. As a result, 131 companies have been examined with the multiple regression estimation model. The findings show a significant relationship between cash dividends per share and future earnings growth. Furthermore, there is a sig nificant relationship interaction term between the dividend payout ratio and the investment growth assumption. This relationship is also observed for return on equity and dividend payout ratio

Competitiveness and Entrepreneurship, and their Effects on Economic Growth

Entrepreneurship is the foundation of competition and innovation among firms, as well as on the national economy. In order to create a favorable environment for entrepreneurship strengthening, it must use symmetric and appropriate competitive conditions with entrepreneurship, to improve production and employment, and thereby increase economic growth. Therefore, the main objective of this study is to investigate the effects of competitiveness and entrepreneurship, which ultimately lead to economic growth. In this paper, through collecting library resources and with a descriptive approach, the interrelations between different components of competitiveness and entrepreneurship, as well as their effects on economic growth, are discussed

The Impact of Economic Complexity on Economic Growth in N-11 Countries: A Panel ARDL Approach Study

Economic complexity is a relatively new concept developed in recent years to assess the productive characteristics of countries. It not only explains the production structure, but also helps examine differences in income and growth across countries. In this paper, we estimate the macroeconomic impact of economic complexity on growth of a sample of N-11 countries for the period 2000-2020, using the economic complexity index developed by Hidalgo and Hausman (2009). Diagnostic tests confirmed the assumption of slope coefficient heterogeneity and cross-sectional dependence of the error term. Thus, we employ the Pesaran (2006) Common Correlated Effects Mean Group estimator (CCEMG) and the Chudik and Pesaran (2015) Common Correlated Effect Pooled Mean Group (CCEPMG) methodology. The findings suggest that economic complexity is one of the key determinants of long-term economic growth. However, its impact on economic growth is not significant in the short term, suggesting that the impact of changes in production structure on economic growth is time-sensitive. The coefficients of other control variables such as human capital, investment, institutional quality, and inflation rate were statistically significant

The Role of Enabling Trade Indices on Iran's Exports: Gravity Model Approach

The importance of establishing “Enabling Trade” measures in the countries of origin and destination of exports is of great importance in the international economic literature. In this regard, many studies have shown that improving Enabling Trade can reduce trade costs and improve export performance. However, in previous studies, the issue of Enabling Trade at export destinations and its impact on the commercial performance of export sources has not received much attention. In addition, the need for non-linear estimation of gravity models has been almost completely agreed in the past decade. Therefore, this article studies the estimation of the impact of the Poisson Pseudo-Maximum Likelihood (PPML) on the trade facilitation of its 21 trading partner countries from 2008 to 2016. Enabling Trade Index (ETI) includes four sub-indexes: market access, border management, transportation and communications infrastructure, and operating environment. The results show that Enabling Trade Indices such as market access, border management, infrastructure, and operating environment in the country of origin and export destination countries have had a positive and significant impact on trade flows between Iran and its trading partners. In addition, the results show that the importance and intensity of Iran’s enabling trade indicators are higher than similar measures taken by its trading partners. The authors interpret it as explaining the important role of enabling trade policies in increasing trade between Iran and its trading partners

Determinants of female entrepreneurship in Iran: An institutional approach

The purpose of this paper is to analyse the factors that influence female entrepreneurship (opportunity and necessity entrepreneurship) in Iran, using institutional economics as the theoretical framework. The empirical research uses the Logit Model and the Multinomial Logit Model to analyse a dataset for Iran based on the Global Entrepreneurship Monitor (GEM) and covering the period 2011-2015. The study concludes that informal factors (fear of failing, entrepreneurial skills, and female networks) are more relevant to female entrepreneurship than formal factors (education and start-up capital). The research recommends that policymakers consider the institutional factors that affect female entrepreneurship in Iran and design support policies to foster female entrepreneurial activity

Entrepreneurship and Economic growth: the mediation role of finance

The purpose of this paper is to examine the mediating role of finance in the relationship between economic growth and entrepreneurship in a sample of 17 OIC countries. We developed a model where banking finance as a proxy for Access to finance mediates the relationship between the total early stage entrepreneurship (TEA) as a proxy for entrepreneurship and economic growth. Correlation, Baron and Kenny approach (causal steps approach) and PROCESS Macro (normal test theory) developed by Hayes were used to find out the direct and indirect effects of financing between entrepreneurship and economic growth. The bootstrap mediation results indicated that finance was a significant predictor of entrepreneurship and entrepreneurship was a significant predictor of economic growth. These findings support the mediation hypothesis. In addition, findings showed that there is a positive relation between entrepreneurship and economic growth and a positive relation between finance and economic growth in OIC countries. Furthermore, the findings of this study indicate that the total association between entrepreneurship and economic growth in OIC countries is not only direct, but also that entrepreneurship contributes to levels of economic growth through the increased levels of finance. As a result, countries with higher levels of access to finance tended to experience entrepreneurship at higher levels, which in turn contributed to the emergence of increased levels of economic growth. The results indicated that the direct effect of entrepreneurship on the economic growth remained significant when controlling for finance, thus suggesting partial mediation. In other words, finance only mediates part of the effect of entrepreneurship on economic growth

Empreendedorismo e crescimento económico: o papel de mediação do acesso ao financiamento

The purpose of this paper is to examine the mediating role of finance in the relationship between economic growth and entrepreneurship in a sample of 17 OIC countries. We developed a model where banking finance as a proxy for Access to finance mediates the relationship between the total early stage entrepreneurship (TEA) as a proxy for entrepreneurship and economic growth. Correlation, Baron and Kenny approach (causal steps approach) and PROCESS Macro (normal test theory) developed by Hayes were used to find out the direct and indirect effects of financing between entrepreneurship and economic growth. The bootstrap mediation results indicated that finance was a significant predictor of entrepreneurship and entrepreneurship was a significant predictor of economic growth. These findings support the mediation hypothesis. In addition, findings showed that there is a positive relation between entrepreneurship and economic growth and a positive relation between finance and economic growth in OIC countries. Furthermore, the findings of this study indicate that the total association between entrepreneurship and economic growth in OIC countries is not only direct, but also that entrepreneurship contributes to levels of economic growth through the increased levels of finance. As a result, countries with higher levels of access to finance tended to experience entrepreneurship at higher levels, which in turn contributed to the emergence of increased levels of economic growth. The results indicated that the direct effect of entrepreneurship on the economic growth remained significant when controlling for finance, thus suggesting partial mediation. In other words, finance only mediates part of the effect of entrepreneurship on economic growth