Marjan Zamani; Mohsen Mohammadi Khyareh; Reza Mazhari
Abstract
Extended abstract1- INTRODUCTIONThe recent global crisis and the emergence of widespread unemployment and declining economic growth in many economies have increased the importance of self-employment and entrepreneurial activities. in addition, in order to alleviate the government's responsibility in ...
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Extended abstract1- INTRODUCTIONThe recent global crisis and the emergence of widespread unemployment and declining economic growth in many economies have increased the importance of self-employment and entrepreneurial activities. in addition, in order to alleviate the government's responsibility in elimination of unemployment and developing entrepreneurship, various measures and policies have been considered to ensure the success of entrepreneurs, the most important of which is to establish an appropriate institutional framework to ensure the success of entrepreneurs. when formulating institutional policies support entrepreneurship then entrepreneurship can play an important role in national economic growth and development (Bjørnskov & Foss, 2013; Baumol & Strom, 2007; Levie et al., 2014). it should be noted, that in order for entrepreneurial activity to lead to economic growth, entrepreneurs must operate freely without worrying about government or others violating private property rights. entrepreneurs in a free market react to market incentives and price signals, and this leads to an efficient market trend. thus, just as countries provide more economic freedom by protecting private property, reducing regulations and taxes, and limiting rent-seeking opportunities. this leads to better institutional quality, which in turn promotes productive entrepreneurship and enhances economic growth and development (Gwartney & Lawson, 2009; Wiseman & Young; 2013). in fact, it can be concluded that the decision for entrepreneurial activity depends to some extent on whether the institutions support economic freedom or not. in other words, where there is no rigid government control, the conditions are right for an entrepreneurial business culture to emerge. however, this is not the case in many economies because the institutions that are supposed to promote entrepreneurial activities, on the contrary, restrict entrepreneurial activities. therefore, the main purpose of this study is to investigate the impact of economic freedom and entrepreneurial activities on economic growth in selected developing and developed countries.2- THEORETICAL FRAMEWORKThe importance of the role of institutions in the relationship between entrepreneurship and economic growth has been studied in many studies (Acs et al., 2018; Bjørnskov & Foss, 2016). The findings of these studies indicate that the quality of institutions is a factor in encouraging productive entrepreneurship and a barrier to unproductive entrepreneurship; this, in turn, leads to higher economic growth. Market-supporting institutions (such as economic freedom and competitiveness) lead to higher rates of entrepreneurial activity, and increased entrepreneurial activity leads to greater economic growth (Urbano & Alvarez, 2014). Furthermore, the results of the research indicate that some of these differences are due to the diversity of types of entrepreneurships, the characteristics of the macroeconomic environment or the different institutional conditions in which entrepreneurs operate. On the one hand, in an economy with higher levels of institutional quality, the rate of entrepreneurship as one of the main factors increases economic growth. But on the other hand, in economies with low institutional quality, unproductive entrepreneurial activities take shape. That will have little or no negative impact on economic growth. Therefore, this insight can be used to understand and explain why entrepreneurial activities in some countries have strengthened economic growth but in some other countries have not encouraged economic growth.3- METHODOLOGYThe purpose of this study is to investigate the interaction between entrepreneurial activities and indicators of economic freedom on economic growth in selected developing countries for the period 2010-2018. the statistical population consists of 33 developed countries and 33 developing countries. the selection of countries is based on the availability of data.One of the main challenges in the empirical test of the impact of institutions on economic growth is the endogenous nature of institutional variables. one of the suitable econometric methods to solve or reduce the problem of endogeniety of institutional indicators and correlations between institutional variables and other explanatory variables is model estimation using gmm approach of dynamic panel data. therefore, in the present study, GMM modeling has been used to examine the relationship between entrepreneurship, economic freedom and economic growth.4- RESULTS & DISCUSSIONThe results generally indicate that the interaction between entrepreneurship and indicators of total economic freedom, rule of law, efficiency of laws and regulations and open markets on economic growth in both groups of selected countries has been positive and significant. also, the interaction between government size and entrepreneurship in developed countries has been positive and significant, but has not been significant in developing countries. also, according to the model results, economic freedom in developing countries has had a greater impact on economic growth, but this effect has been weaker in the group of developed countries. because in developing countries with less economic freedom and more unemployment potential, improving freedom indicators will increase people's motivation for entrepreneurial activities and thus higher economic growth. in addition, the results indicate that the impact of entrepreneurship on economic growth has been positive in developed countries and negative in developing countries. 5- CONCLUSIONS & SUGGESTIONSIn this study, the interaction effect of economic freedom entrepreneurship on economic growth in two selected groups of developing and developed countries was investigated. according to results, the following suggestions are presented:Government policy should be taken to improve the index of economic freedom by enacting appropriate laws to facilitate investment, encourage foreign direct investment, remove restrictions on access to foreign currency, reduce tariffs appropriately, and remove non-tariff barriers.Given the different impact of entrepreneurial activities in the two groups of countries under study, in expressing the belief that entrepreneurship always encourages economic growth, the aspect of caution should be considered. in fact, since most of the entrepreneurial activities in developing countries are of the necessity type, entrepreneurship has a negative relationship with economic growth in these countries. as a result, policymakers need to promote opportunity-based entrepreneurial activities by implementing policies such as improving institutional quality, providing the right business environment, and increasing the convenience of businesses.
Royia Mahdavi Roshan; Reza Mazhari; Mohsen Mohammadi Khyareh; Esmail Shirazi
Abstract
Expended Abstract: Introduction Economists emphasize the endogenous and exogenous causes of the bank deferrals related to loan repayment. Whereas banking experts classify the causes of loan default as external and internal organizational factors. According to targets of article 2 of the ...
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Expended Abstract: Introduction Economists emphasize the endogenous and exogenous causes of the bank deferrals related to loan repayment. Whereas banking experts classify the causes of loan default as external and internal organizational factors. According to targets of article 2 of the agricultural bank of Iran the Statute (2020), this bank should provide credit facilities for a better life in the countryside, increase the income level of villagers, increase agricultural production, develop SMEs located in rural areas, and participation in related activities. Therefore, to achieve the goals of providing financial resources, it is important how the resources are absorbed and how they are returned. Studies by Hassanzade and Habibi (2010), Shabani and Jalali (2012), and Bafandeh et al. (2015) regarding the crisis of bank deferrals in Iran indicate that the role of indigenous factors is more decisive than exogenous factors. The study Arabmazar and Roeintan (2013) is dedicated to non-timely repayment of bank facilities have most important to bank deferrals than other factors. Most of Iran's bank deferrals studies paid attention only to exiguous factors and did not pay enough attention to endogenous factors. As observed, recent research has considered the important factors of this bank deferrals problem, but none of them work on the interest factor as a crucial factor, and we must address this in this study. Theoretical frame work In the theoretical section, we draw Minsky's theory concerning bank deferral and financial crisis to provide a theoretical for identifying the factors that have influenced the improvement of loan repayment. Goldsmith (1969) and (1973), McKinnon, and Shaw (1973) argued for financial liberalization versus financial repression. The common denominator in these studies is focused on financial liberalization; setting a ceiling for interest rates inevitably leads to a small constraint on the credit system that the result is a low level of saving and investment. In contrast, Minsky (1995:1) mentioned that in the post-second World war period, the OECD could control the rate of interest instead of money supply and achieve "the golden age of capitalism". Methodology Multiple logit regression (MNLR) is simply a generalized or extended dual logit regression with more explanatory variables. In other words, we want to investigate the simultaneous effects of several independent variables on the dependent variable y. MNLR regression is also known as multiple and multi-state logit because it is used to model the relationship between a multi-state response variable and a set of independent variables. A multi-state response variable can be a sequential variable or a nominal variable. Result and Discussion Since 1936 there has been a serious debate among Keynesian and Walrasian economists on the role of money and finance. Walrasian economists reject the finance dominance of capitalist economies. While, Mineski (1995: 3), upon on the modern version of the Walrasian of general equilibrium theory, ignores the finance dominance of capitalist economies. If economic theory is to be relevant for the intense finance world in which we live, it fully incorporates financial factors into determining the economy's behavior in the economy. Such a theory should not hold that financial factors are "exogenous shocks" to the economy or explain whatever malfunctioning an economic theory economy is. Money and finance as nominal variables do not play a dominant role in the preferences, commodities, and services of the economy resulting from the incompetence of central bankers. Result and Suggestions Our finding on the empirical sector shows disagreement among economists about the impact of interest rates on bank deferrals. The relationship between loan size and the amount of loan deferral penalty is another of the most challenging issues among theoreticians of loan and credit. Our study results on variables of repayment and extension loan have a significant and negative effect on improving the bank repayment, which in this regard is consistent with the study of Ferdowsipur et al. (2013). Other findings indicate a direct relationship between interest rates and default of loans on the one hand and the number of installments in the improvements of payment of bank claims on the other hand, which is consistent with Ashraghi et al. (2015), Makorere (2014) and Ferdowsipur et al. (2013). Suggestions 1. It is recommended to provide the necessary loan amount for investment and improve productivity in the agricultural sector to generate higher income for farmers, which is undoubtedly the result of an improvement in bank loan repayments. 2. Delay penalties did not significantly affect the improvement of farmers' installment repayments, so it is suggested that remove the delay penalties policy, especially on small farmers, and replace it with collateral. 3. It is suggested that the tax exemption on the agricultural sector be omitted, so the high-income farmers have to pay the highest tax. Thus the money from this policy provides to the agricultural bank to financing small farmers. Therefore, through the policy, we can certainly expect that increasing investment in this sector can lead to prosperity and increase the growth of agricultural production on the other hand. As a result, under improvement of loan repayment, it is possible to provide another ground for rural development.
