Original Article
Urban Economy
Zarir Negintaji; Seyyed Ataollah Sinaee
Abstract
1- INTRODUCTION
Today, the issue of providing financial resources is important for municipalities all over the world, including Iran. These sources of income are influenced by macroeconomic conditions. This means that, in the economic recession, they decrease and city ...
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1- INTRODUCTION
Today, the issue of providing financial resources is important for municipalities all over the world, including Iran. These sources of income are influenced by macroeconomic conditions. This means that, in the economic recession, they decrease and city managers can not fulfill their duties. The financing methods required by municipalities in all parts of the world are direct sale of services, local taxes, use of government aid and issuance of bonds. But, the importance of these sources of revenue is different for big and even small cities in Iran. That is, the share of these resources from the total revenue of municipalities in a city like Tehran is low, and about 60-70% of the revenue sources of municipalities are related to housing.
This dependence of the income of municipalities on their housing sector has become a serious challenge, because in times of recession in the housing sector, the income of municipalities decreases. Therefore, during the past decades, Tehran Municipality provides a discount for urban development fees during the recession. Now, the basic question of this study is that the urbaning permit fee have an effect on the private sector's investment in housing in Tehran.
2- THEORETICAL FRAMEWORK
The theoretical analysis of investment in the housing sector is based on conventional investment theories in macroeconomics. Two important investment theories are discussed: the theory of the principle of acceleration (which itself is divided into two models of fixed acceleration and flexible acceleration model) related to the classics and the final efficiency theory of investment related to John Maynard Keynes. Acceleration pattern theory is based on the concept that changes in sales or income cause an increase in total investment. But Keynes believed that the amount of investment depends on the final efficiency of capital and interest rate. The relationship between investment and capital efficiency and interest rate is inverse. Both theories are used in this study.
3- METHODOLOGY
In this study, an attempt is made to investigate the impact of urban development complications (permit issuance complications) on private sector investment in Tehran city housing. To do this, the Auto Regressive Distributed Lag (ARDL) was used, and the data obtained from the Central Bank of the Islamic Republic of Iran and the statistics of the Tehran municipality for the years 2010-2018. In this model, the dependent variable is influenced by the lag of the dependent variable itself and other independent variables. It should be noted that in order to investigate the long-term and short-term relationships between the dependent variable and other explanatory variables, collective methods such as the Engel-Granger method and ECM error correction models have been used.
4- RESULTS & DISCUSSION
The long-term model estimation results show that the coefficients of two macro-economic variables, i.e. GDP and liquidity, are positive and significant. The interest rate of bank deposits has a negative effect (according to common theories), but it is insignificant. The price of coins, as a competitor for housing, has a negative and significant effect, which is consistent with the initial expectation as well as previous studies. The total index of Tehran Stock Exchange has a positive and significant relationship with investment in the housing sector. Finally, the building permit fee do not have a significant impact on private sector investment. This shows that the reduction of building permit fee does not affect the motivation of private sector investors in Tehran housing in the long term.
5- CONCLUSIONS & SUGGESTIONS
The long-term pattern shows that building permit fees do not have a significant effect on private sector investment in Tehran housing. This means that the discount in building permit fees may create sources of revenue for Tehran Municipality in the short term, but it has no effect in the long term. Other results of this model have shown that Tehran, macroeconomic variables such as GDP, liquidity and stock market index have a positive and significant effect on private sector investment in Tehran city housing. This means that the growth of national production will cause the growth of all economic sectors, including housing, and this will provide the necessary ground for the development of investment for the private sector. In addition, the increase in liquidity allows more resources to be transferred to the housing sector. Also, considering the large number of large construction companies in the stock market and providing financial resources from this market, the growth of the market has a positive and significant effect on investment in the housing sector of Tehran. The interest rate of bank deposits also has a negative but insignificant effect on investment in the housing sector, which can be caused by the high inflation in Iran's economy. Finally, coin price has a negative relationship with housing investment.
Therefore, according to our results, it is suggested that Tehran Municipality stop applying discounts on urbaning permit fees and seek to identify sources of revenue and new methods of financing or use the items such as renovation fees, waste, business and trade, advertising boards and instruments available in the financial markets.
Original Article
Macroeconomics
Hadi Keshavarz; Ramezan Hosseinzadeh
Abstract
1- INTRODUCTION
Investigation of the importance and the impact of various factors on the economic growth of countries is crucial in short-term and long-term planning in various countries. Traditional theories and models of economic development only consider capital and labor as economic growth ...
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1- INTRODUCTION
Investigation of the importance and the impact of various factors on the economic growth of countries is crucial in short-term and long-term planning in various countries. Traditional theories and models of economic development only consider capital and labor as economic growth factors for nations and regions. Today, economists consider innovation, along with knowledge and technology, to be one of the fundamental variables in the economic development and development of countries.
Knowledge and innovation can generate social welfare in diverse regions and countries and contribute to achieving sustainable economic growth. In this regard, it is crucial to note that the path of innovation development varies across regions and countries, and that a distinct innovative geography is created based on these differences. The issue of inter-regional or inter-country spillover effects of various variables, such as innovation spillovers, is a second crucial aspect of economic growth and development planning in different regions or countries. Thus, innovation can impact both the economic development of the innovating country and the economic growth of neighboring countries with trade linkages to that country. Examination the spatial dimension of the problem will be crucial for determining how spillovers occur and their effectiveness in the innovation process as well as economic growth and development, whereas excluding inter-regional (inter-country) effects will bias the results and misleading results. On the other hand, considering the inter-regional (inter-country) effects of innovation and other variables in the model can help in the planning of regional development in different countries.
2- THEORETICAL FRAMEWORK
According to new theories, there are four distinct categories of innovation: product innovation, process innovation, organizational innovation, and marketing innovation. There is substantial evidence that various categories of innovation have distinct economic effects in countries. These differences are primarily attributable to variations in the level of pertinent externalities (spillovers) and the capacity of innovators to internalize the public benefits of these activities (fit). Thus, innovative knowledge penetrates the production process in two different ways. The first instance is when a company utilizes new technical knowledge developed during the production process. The second consequence is the spillovers of such knowledge. However, knowledge diffusion in other innovation institutions can only be observed once innovation and technology have reached a certain level.
The concept of knowledge spillover is closely associated with the correlation effect, where in the recipient of an innovation assimilates it to facilitate economic advancement. The spillover effect has the potential to yield beneficial outcomes by fostering innovation and facilitating economic progress, but it can also have negative consequences. The adverse impact of knowledge spillover primarily arises from external circumstances, as well as the inherent uncertainties and risks associated with research and development endeavors. Consequently, the inability of spillovers to fully realize the benefits of their research and development endeavors diminishes enterprises' motivation to allocate resources towards innovation. The positive impact of knowledge spillover is directed towards individuals or organizations that possess absorptive potential, enabling them to effectively assimilate and utilize sophisticated information and technology.
3- METHODOLOGY
The primary objective of the present study is to examine the direct and spillover effects of innovation on economic growth within the D8 group of countries during 2012 -2021. This investigation will be conducted through the utilization of a spatial econometric model. Spatial econometrics is widely regarded as a major development in the field of estimation, having emerged alongside the introduction of the "New Economic Geography (NEG)" theory. This technique is associated with the research conducted by Krugman (1991), Fujita, Krugman, and Venable (2001), as well as Venables and Puga (1998). The econometric models under consideration has the capability to incorporate both spillover and indirect impacts of variables, in addition to the direct effects that are typically addressed in classic econometrics.
4- RESULTS & DISCUSSION
Based on the results of the model, the direct effect of innovation index on economic growth has been positive and significant. Also, the indirect effects of this variable have been positive and significant. Therefore, it can be said that the amount of innovation in the studied countries has both domestic and international spillover effects (through the establishment of trade relations) on the economic growth of the countries.
5- CONCLUSIONS & SUGGESTIONS
Based on this, it is suggested that the studied countries pay special attention to the issue of innovation. Provide the necessary incentives to strengthen innovation in these countries, such as paying special attention to patents. Because having a patent is one of the motivating factors for innovation and further to achieve new technologies. This can be the basis for creating new processes in production, inventing new methods in countries. Paying attention to the spillover and indirect effects of innovation can also be very important. Based on this, it can be suggested that countries should pay attention to the fact that they prioritize the trade of goods with more knowledge (accumulation of knowledge and its transfer) in order to benefit more from the spillover effects of innovation. The higher the trade and especially the import of goods with knowledge and innovation, the countries can use the knowledge and innovation stored in these goods to strengthen knowledge and innovation within the country and economic growth will be strengthened.
Original Article
Seyyed Abdollah Razavi; Mohammad Bagher Bayat
Abstract
1- INTRODUCTION
Financial markets and oil exchanges and their expectations play a major role in understanding oil price changes. To analyze and understand how crude oil prices change, it is important to pay attention to these markets. In IRAN, the International Deputy of National Oil Company ...
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1- INTRODUCTION
Financial markets and oil exchanges and their expectations play a major role in understanding oil price changes. To analyze and understand how crude oil prices change, it is important to pay attention to these markets. In IRAN, the International Deputy of National Oil Company determines the price of Iranian oil by using different pricing methods and mechanisms. One of the factors they use for pricing is the price of oil in the FOB Persian Gulf region, including the oil price of Dubai and Oman oil exchanges.
The current pricing models of Iran's crude oil prices in the East Asian market have not yet taken into account the role of stock exchanges and capital markets in price calculations. Current method of determination of the price of Iranian crude oil in Asia, it uses the price of index oil in the physical market and the price of index oil in the stock market of that region. This article examines the impact of the financial layers of the Dubai crude oil market on the price of Iranian crude oil and the extent to which the behavior of the price of Iranian crude oil in the Asian market affects the financial markets of Asia such as the Dubai Stock Exchange.
2- THEORETICAL FRAMEWORK
The Asian oil market is one of the largest markets in the world and the largest oil customers such as China, India, etc. are located in this region. Also, this market is one of the largest customers even in the condition of Iran's oil embargo, so investigating various financial factors and market structure of competitive and leading crude oil in the Asian market is one of the important issues in maintaining the country's oil market. If the country's oil price formula is developed based on the oil considerations of other competitors, it will have the characteristic of being competitive with other producers in this region. On the other hand, maintaining the market share in the Asian market depends on the price formula that takes into account the most considerations of the capital market (stocks in this region) along with the fluctuations in the price of crude oil indicators in this market.
3- METHODOLOGY
In this research, the multivariate GARCH method and daily time series data of 2010-2019 are used to investigate the impact of the financial structure of the Asian oil market on the price of Iranian oil.
4- RESULTS & DISCUSSION
The price of Iranian crude oil in the Asian market is dependent on the financial markets of Dubai index crude oil, and as expected, using the Brent market structure in the ICE exchange for the pricing of Iranian crude oil in the Asian market gives a wrong signal because the European crude oil exchange market has a significant effect on the price of crude oil. Iran has no market in the East and this is despite what is usually said in academic societies. On the other hand, due to the regional nature of the oil market, the price of regional crude oil influences the Iranian oil market, and the stock market has a regional effect on the price of crude oil.
5- CONCLUSIONS & SUGGESTIONS
In this research, three markets were examined; the Oil market, the Tokyo stock market and the Iranian crude oil market in the East Asia region. First, a shock is created in the stock market. With the effect of policy changes, market expectations are changed and price shocks are created in the stock market. The effect of turbulence in one market is transferred to other markets. Every shock in one market creates a positive impulse in another market. In other words, if the fluctuations in the futures market (Dubai Stock Exchange) increase, the price of Iranian crude oil will also increase in the market and have a positive effect on the fluctuations.
Based on the findings of this research, it can be stated that oil exchanges play an important, influential and positive role in determining the price of Iranian crude oil, and any fluctuation in the market structure of oil exchanges will cause fluctuations in the price of Iranian crude oil. Also, the price of Iranian crude oil in the Asian market is a function of the structure of the oil market (contango or backward).
The Ministry of Petroleum, especially the international affairs of the National Iranian Oil Company, should pay attention to the developments of the oil market regionally, the connection of the capital and futures markets in crude oil pricing, oil sales negotiations, marketing and conclusion of oil sales contracts. Also, it is suggested to modify the traditional pricing models in the Asian market in such a way that in the oil pricing formulas in the Asian market, especially the changes in the future prices of the index crude oil of this region and its stock market and the financial structure of the oil market of Dubai and Oman are also taken into account. Also, in the pricing formula of Iranian oil in the Asian market, in addition to the role of Saudi Arabia as a competitor, use the variables of the model used in the current article. It is also suggested that the international affairs of the National Oil Company pay attention to futures contract transactions in paper exchanges in this Asian market to cover the risk caused by crude oil price fluctuations. In short-term and long-term budget planning of the government should pay attention to the relationship between capital markets and oil futures with the oil market, especially in this region; have such models and use them in their policies. The central bank of IRAN also has models to explain the behavior of crude oil prices in the market so that it can control the currency fluctuations that are mainly caused by the fluctuations of the financial markets and the oil market. The Budget Management and Planning Organization needs to estimate the price of crude oil in the annual budget to calculate the country's annual income, and also to implement development plans, it is necessary to estimate oil revenues and oil prices. Based on the analysis of financial factors, they can have a more correct analysis of the price of oil.
For further studies, other target markets for the sale of crude oil (including the Mediterranean and North American markets) and other grades of Iranian crude oil in those markets can be examined. It is better to use other econometric methods, for example, IGARCH, ARFIMA and FIGARCH methods for estimation. In the same way, I suggest that in the next studies, the interest rate and the dollar rate, as well as the effects of other stock exchanges, should be considered as a variable, and the effect of other economic indicators should be investigated, and other non-oil stock market items can also be added to the model and be checked
Original Article
Regional Economics
Zeinab Baradaran Khanian; Zahra Azari; Davood Behboudi
Abstract
1- INTRODUCTION
In order to eliminate the imbalances in economic sectors, especially in developing countries, due to limited resources and emphasis on investment and allocation of capital resources to key sectors, the government adopts policies that the society has the ability to implement. ...
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1- INTRODUCTION
In order to eliminate the imbalances in economic sectors, especially in developing countries, due to limited resources and emphasis on investment and allocation of capital resources to key sectors, the government adopts policies that the society has the ability to implement. This causes more attention to the sectors with higher priority for investment. Considering the very high share of services in recent years, investment in this sector, in addition to economic growth, provides the necessary resources for investment in other economic sectors. Hirschman believes that economic development is a continuous process that is created by the growth of the leading sector and the establishment of connections between this sector and other economic sectors. Since the share of the service sector in GDP and employment has always been higher than other sectors of the economy in recent years, the service sector has been identified as a large or strategic or dominant sector in the country. In recent years, investment in this sector, in addition to economic growth, has provided the necessary resources for investment in other economic sectors and has acted as a leading sector in Iran's economy.
On the other hand, not paying attention to the talents and potential possibilities of Iran and its provinces, among other things, has faced serious challenges to development. East Azarbaijan province has not been exempt from this problem with its unique natural and human facilities that can stimulate development in different sectors. According to the material presented about the contribution of the service sector as a productive and profitable sector in the economy and the position of its sub-sectors in the economic and social system of countries including Iran, recognizing and explaining the current situation of the country's provinces and accordingly, East Azerbaijan province is one of the most important and influential provinces in the economic growth and development of the country, and as the pole of the northwest region and having unique natural and human resources that can stimulate development in various sectors, it has great importance.
2- THEORETICAL FRAMEWORK
For the first time, Peru (1968) proposed another group of theories in economic literature, which are known as growth pole theories. In Peru's theory, simultaneous growth does not occur everywhere, but occurs at points or poles of development that have high attraction power. In developing countries, it is not possible to develop all economic sectors at the same time. In the initial stages of the formation of the pole, although the activities are concentrated in the center of the pole and cause aggravation of imbalances and imbalances, but the supporters of this theory believe that after the formation of the pole, the diffusion stage comes and during those positive effects flow to the surrounding environment. Therefore, according to this theory, there is a need to identify the key sectors of developing societies in order to prioritize them.
3- METHODOLOGY
The first part of the present research was conducted in terms of the purpose of the evaluation type and from the perspective of the method in a descriptive and analytical manner and based on qualitative data, the data was collected by a survey method through the distribution of questionnaires. Multi-sector analysis (MSA) has been used to examine the key core of the service sector of East Azarbaijan province. In the second part of the methodology, according to the indicators mentioned in the theoretical foundations for the sustainable development of tourism, it is possible to obtain a complete assessment of the level of access to each of these indicators in East Azerbaijan province, which is the main step in answering this question. What is the state of the province in each of the indicators related to the development of sustainable tourism? To extract the value of the identified indicators, using the Cochran sampling method, the sample size was estimated to be 384 people. After designing the questionnaire tool and verifying its validity using the content and form method, by distributing the questionnaire, field data was collected by random sampling method from among the residents of different regions of East Azarbaijan province, and in the next stage, the indicators were used using Python software and scaled and standardized between zero and one as follows.
4- RESULTS & DISCUSSION
In this study, using multi-sector analysis, tourism has been identified as the key core and the most effective service sub-sector of East Azerbaijan province. Examining the indicators related to sustainability, which includes 5 economic, social, environmental, cultural and social dimensions, shows that the level of sustainability of tourism on a macro scale is 0.256 of one unit. This means that despite the existing attractions and potentials in the province, this sector has not found its proper place and is far from achieving sustainability. Also, the examination of the status of the five indices shows that the environmental index with a score of 0.299 of the unit has the highest score among other indices, while the social index with a score of 0.166 is one of the lowest.
5- CONCLUSIONS & SUGGESTIONS
According to the findings of the study, it can be said that in order to improve and develop indicators related to sustainable tourism in the province, it is necessary to continue the current programs and activities related to the sustainable development of tourism, and those responsible should focus more on two economic and social components. Because, first of all, tourism can create jobs if it is sustainable, and if the stated goals are achieved, sustainable tourism can provide opportunities for employment and income for local residents and the development of infrastructure structures to enable sustainable development. Therefore, in the future research, it is suggested to develop tourism sustainability strategies in East Azarbaijan province.
Original Article
Economic Sociology
Reza Rahmati
Abstract
1- INTRODUCTIONTraditionally, oil has been mentioned as a commodity that has a distant relationship with development. Consedring the oil producing countries, especially the countries that converge with the Middle East region in terms of geographical, political and bio-economic conditions, shows that ...
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1- INTRODUCTIONTraditionally, oil has been mentioned as a commodity that has a distant relationship with development. Consedring the oil producing countries, especially the countries that converge with the Middle East region in terms of geographical, political and bio-economic conditions, shows that the relationship between oil on the one hand and the capabilities of the government on the other hand, there are in this area.It seems that a common denominator is that the government has been powerful in terms of control but weak in terms of political, economic and cultural capabilities. Regarding the reasons for underdevelopment in countries that have abundant resources, many perspectives and levels of analysis have been discussed; economic, political, social and even cultural reasons. Therefore, the view from the angle of political economy can be explanatory to a great extent.However, in some countries, oil is not only considered the main variable of underdevelopment, but also has become a part of the development process. Norway is one of the countries where oil has not been the only cause of backwardness, but in a systematic process, it has acted as an important part of the realities of the system based on public welfare and social services.The question that arises here is what caused Norway not to be captured by the mystery of "resource curse" and "Dutch disease"? In response to this question, the hypothesis of the research is that the institutional capabilities in Norway have led to the formation of a powerful government along with other institutional resources and these economic and political institutions are capable both in oil production and the allocation of oil revenues in the national budget and in the system. Their distribution shows a developed performance. 2- THEORETICAL FRAMEWORKThe important issue is the effects of the type of political systems and political institutions similar to the government on the levels and quality of the economy. In addition, according to Daron Acemoglu and James Robinson, subsequently, the effects of political institutions or political alignments on economic relations cannot be hidden (Acemoglu & Robinson, 2012).Therefore, economics as the science of understanding the optimal and productive human behavior is affected by politics and political processes, and politics as "authoritative allocation of values for a society" (Easton, 1957: 383-400), or "struggle over authority" (Lindblom, 1997) is affected by economic institutions. Therefore, the institution's role in both economy and politics is considered a central role. Institutions are defined from different perspectives and levels. Of course, the definition of institutions also suffers from the same plague that other concepts in human sciences suffer from; It means lack of consensus in the definition. 1. Institutions Among political economy thinkers, there is less consensus definition of institution, even among institutionalists, there is no single definition of institution, each thinker has chosen an independent definition of this concept based on his research flow or intellectual project. Some of them have defined institution as follows: a set of behavioral rules created by humans in order to manage and shape human interactions, which helps them to some extent, expectations from have the actions of others (North, 1990).One of the most utilitarian definitions of institution was provided by Hamilton, an institutional economist (Hamilton, 1932: 84). He considered the institution as "an intellectual or practical path regarding the prevalence and permanence of a certain group that is engraved in the group habits or customs of a people". This definition explains Veblen's previous definition of institution as "fixed habits of thought common to all human beings" (Veblen, 1919: 239).Or with the same interpretation of North, they are considered "the rules of the game in society or the limits invented by humans that shape human interaction" (North 1990: 3). 2. Development in the Attitude of InstitutionalismSome believe that institutionalism lacks a systematic core theory (Hodgson, 1998: 174) and therefore, institutionalism has a gradual view of categories similar to development, which means its lack of theoretical coherence.The lack of institutional resources causes the rule of law not to exist, or the rule of law suffers a systematic weakness. This is the reason why strong economic and political institutions lead to the formation of a strong and powerful government. Some researchers even argue that institutions can differentiate the quality of use of governance and even the quality of statecraft. Ideas similar to that oil causes the formation of rentierism. The rentier economy is a sick economy. Oil makes governments addicted to rents and they are the result of an understanding of the relationship between resources and development, which confirms that countries with rich resources are facing setbacks in terms of development.This idea follows that "institutions are weaker in countries with rich resources" (Van Der Ploeg, 2010).The starting point of this idea is, on the one hand, the theoretical formulations related to rentierism, and on the other hand, the empirical evidence regarding the underdevelopment of resource-rich states.Rich resources cause an increase in resources and capital accumulation by the government and ruling elites, an increase in resources causes political rulers to become economic investors, windfall resources make the government independent from all political and economic institutions, and the background It creates a big and fat government that intervenes in the public and private spheres. A big state not only does not provide the basis for the formation of economic and political institutions, but also becomes a political super-institution. The super-institution of the government takes the place of the government as an institution of institutions and an institution alongside other institutions. By taking over the system of extraction, production, distribution and redistribution, the government's super-institution has ordered the economy and this issue causes the creation of an institutional vicious circle. 3- METHODOLOGYThe current research is applied-developmental in terms of its purpose and descriptive-analytical in terms of the researcher's approach. Documentary method was used to collect data and "grounded theory" method (institutionalist theory) was used to analyze them, which was introduced in the theoretical foundations section. 4- RESULTS & DISCUSSION 1. DemocracyAuthoritarianism means anything other than empowering the government. Authoritarianism means making rulers and political institutions unaccountable. They use the main sources of rent and the result of this use of rent sources is the monopoly of power in the hands of the governing body and the closure of economic and political processes. Ranked first in the Economist Intelligence Unit's 2021 World Democracy Index, Norway has a very strong democracy. This country respects the civil liberties of its citizens and the government is held accountable by civil society actors and independent media. 2. Tax Based on development indicators, it seems that there is a relationship between development and a strong tax system (Besley & Persson, 2013: 110-51). Not relying on oil for distribution resources, and relying on a strong tax system, has led to the formation of a strong democracy in Norway. Chart number (1): Personal income tax in Norway (1995-2022) (Tranding Economics, 2023) 3. Social Welfare Social Progress Index (SPI) measures the level of social and environmental needs of citizens in countries. Fifty-four indicators in the field of basic human needs show the foundations of prosperity, the opportunity for progress and the relative performance of countries. This list is published by the nonprofit organization Social Progress Imperative and is based on writings by Amartya Sen, Douglass North, and Joseph Stiglitz (Economist Intelligence, 2013). The situation in Norway is at a tipping point. Norway, having a social-democratic government, has created a situation that has been placed in the first place in the social progress index in terms of social security measures. 4. Economic Freedom The economic freedom index is an annual index and ranking that was created in 1995 by the Heritage Foundation and the Wall Street Journal to measure the level of economic freedom in the countries of the world. The creators of this index claim to have adopted an approach inspired by Adam Smith in The Wealth of Nations that "fundamental institutions that protect the freedoms of individuals to pursue their economic interests lead to greater prosperity for the larger society." They become" (Heritage, 2023a). The welfare states of the Nordic region are known as the states that follow the social-democratic-free market hybrid economy approach (Rahmati, 2020: 235-195). In fact, from an economic point of view, they are considered to be among the protectionist countries or the welfare state (the government that provides social and welfare services to the social classes). Norway rank is 10th among 45 countries in the European region. Norway's economy has registered an overall 2.9 points of economic freedom since 2017, with increased points for the rule of law. However, Norway's economy is still under pressure from excessive government spending (Heritage, 2023b). 5- CONCLUSIONS & SUGGESTIONSThe existence of economic-political institutions is an important factor affecting the formation of democracy and its determining indicators. The formation of democratic political discourse in contrast to authoritarianism can cause greater accountability and transparency in the political system and the empowerment of strong social and political forces in the political environment.In this article, focusing on the subject of economic and political institutions, an attempt was made to examine economics and politics through the lens of institutional discourse. An attempt was made to examine the case study of Norway based on indicators obtained from institutional studies, hence indicators similar to democracy/authoritarianism, social welfare index (SPI), economic freedom index (EF), the tax index and the perception index of corruption were taken into consideration and analyzed accordingly in a comparative approach. Considering the effect of oil on the quality of the formation of institutions in Norway, it seems that the idea of resource curse and Dutch disease, which is one of the main factors of the underdevelopment of countries with abundant resources, has not happened in Norway.In Norway, oil is not only considered a factor of underdevelopment, but due to the formation of established economic institutions, it is also considered as a basis for looking to the future. Norway is an exception to the resource curse. This country is significantly different from the usual oil producer; both in the economy of oil production and in the allocation of revenues in the national budget.The presence of a powerful state along with various economic institutions, which are neither complicit nor forced by the government, has an impact on the Norwegian economy.
Original Article
Regional Economics
Ezzatollah Asgharizadeh; Mehdi Ajalli; Farnaz Almasieh
Abstract
1- INTRODUCTION
The primary goal of open data transparency is to improve government reliability and business opportunities from a political perspective by increasing government transparency and creating new employment and business opportunities from an economic perspective through greater participation ...
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1- INTRODUCTION
The primary goal of open data transparency is to improve government reliability and business opportunities from a political perspective by increasing government transparency and creating new employment and business opportunities from an economic perspective through greater participation and collaboration with the private sector.The next goal is to strengthen the government's competitiveness through economic innovation. As government data openness is expected to have a positive impact on national economies, governments around the world are under pressure for an open data policy.
According to the regulations on the recognition of knowledge-based companies and institutions, knowledge-based companies are private or cooperative institutions that aim to increase science and wealth, economic development based on knowledge and realize scientific and economic goals in line with the expansion of invention and innovation and finally the commercialization of research and development results.(Including the design and production of goods and services) is formed in the field of superior technologies with a lot of added value (especially in the production of related software).
According to the approved regulations, knowledge-based companies pursue goals such as persuading the faculty of universities and research units for more activities in meeting the needs of society and the possibility of increasing the income of faculty members, commercializing research findings, increasing the specific income of universities and research units, the general theme of knowledge-based activity.
Isfahan Science and Research Town as the first organization to establish growth centers and science and technology parks in the country in the area of Azadegan highway in Khomeinishahr and next to Isfahan University of Technology, and close to industrial towns and exemplary tourism areas of Khomeinishahr including Cheshme Lader while supporting the launch andthe development of knowledge-based companies and institutions has been able to take effective steps in the development of production and export of knowledge-based products and sustainable employment of university graduates. In any case, no study has been done on the transparency of government data and its effect on the competitiveness of governments.To fill the research gap, this study investigated the effect of government data transparency on the country's competitiveness with the mediating role of knowledge-based economy at the level of knowledge-based companies based in Tehran and Isfahan.
This research seeks to answer the following questions: 1. How does the transparency of government data affect the formation of the knowledge-based economy of countries? 2. How does the knowledge-based level of a country affect competitiveness? 3. Can the formation of a knowledge-based economy play a mediating role in the effect of transparency of government data on the competitiveness of Iran?
2- THEORETICAL FRAMEWORK
In research studied open government data through a systematic empirical literature review. This study conducts a systematic literature review of 169 empirical studies of open government data and derives a theoretical framework of antecedents, decisions, and outcomes to understand the evidence of these data in the context of the digital economy and a theory-based research agenda to exploit the potential. Research in this framework is presented.
In a research, researchers developed methodologies and applications in the knowledge-based economy by using multi-criteria decision-making analysis.The results showed that the simultaneous discussion of recent methodologies and applications using multi-criteria decision-making analysis and consideration of the challenges shaping the knowledge-based economy depends on the themes of technological forecasting and social changes.
In a paper, researchers have studied the impact of globalization on peace and stability: governance concepts and knowledge economy of African countries.They stated that there is an indirect relationship between globalization and the knowledge-based economy of African countries, which affects peace and stability, and peace and stability are also affected by the knowledge-based economy of the government.The results of the research show that peace and stability of the government are more strongly influenced by globalization in commercial mode than foreign direct investment.The final result of the research indicates that foreign direct investment is not a suitable and useful mechanism for estimating and preserving African knowledge.Therefore, with the development of globalization, peace and stability will increase in African countries.
In a study, under the title of the effect of openness of government data on the knowledge-based economy, they investigated the effect of open government data on the knowledge-based economy by using path analysis and factor analysis. The results of the research showed that the transparency of government data has a positive and direct effect on the formation of knowledge base in a country. Also, the knowledge-based level of a country has a positive effect on the global competitiveness of that country.
In a paper, researchers conducted a systematic review on open governance data design.
Researchers in research titled knowledge-based economy in the European Union, using cluster analysis on the main components of the strategy indicators for the studied countries, tried to find out the position of the 27 countries of the European Union from the perspective of the knowledge-based economy. Their study provided a basis for understanding the position of Romania among the countries of the European Union.
Researchers in research entitled Redefining the knowledge-based economy-sustainable development relationship, examined various definitions and approaches related to the subject of knowledge-based economy and how to measure it, as well as various theories that have been presented in the field of sustainable development, withthe use of content analysis method has been discussed.
In a paper, researchers have done research called knowledge economy by using content analysis.According to them, the advancement of information and communication technologies and the importance of knowledge as a determining factor in organizational competitiveness and productivity require special requirements for the organization.(Hsu et al., 2008) have paid attention to the investigation of competitive policies for the purpose of technological innovations in the era of knowledge-based economy.The results of their study show the positive effect of competitive policies on technological innovations.
In a paper, researchers also investigated the knowledge gap and the relative efficiency of the selected countries in the transition to a knowledge-based economy in an article titled "Development of Southeast Asian countries towards a knowledge-based economy" by using data envelopment analysis.In this article, the performance of selected countries is evaluated by two methods: radar chart and data coverage analysis.
In a research, researchers stated that in the knowledge-based economy, information, technology and learning have been introduced as factors of growth and productivity. In fact, with the continuous application and production of knowledge as the core of the economic development process, the economy necessarily becomes a knowledge-based economy. Knowledge-based economy is an economy in which knowledge is the main key to economic growth. In this economy, knowledge is acquired, produced and disseminated and is used efficiently and effectively to increase economic development.
In a paper, researchers, during a study, examine the effect of different aspects of knowledge (within the framework of knowledge-based economy) on the economic growth of 92 countries during the period of 1960-2000. In this study, using modeling, several indicators are used for each axis of the knowledge-based economy. The results showed that different aspects of knowledge had a positive effect on the economic growth of 83 during the study period.
3- METHODOLOGY
In this study, five constructs were extracted from the literature related to open data and the knowledge-based economy: data openness, knowledge distribution, knowledge creation, knowledge diffusion, and competitiveness.Data transparency is defined as the transparency of government data.Absorption of knowledge is the concept of acquiring knowledge in a country.Creating knowledge means producing new knowledge in a country.Diffusion of knowledge means the distribution of knowledge of one country to other countries.Competitiveness means the competitive advantages of a country.The competitiveness index is obtained from the announced economic reports of the world.
The research method in this study is based on the research orientation, applied type and based on the research strategy, survey type. Also, based on the research method, a description of the type of correlation and the statistical population of this research including specialists, senior managers and experts in the field of government data, knowledge-based economy and competitiveness from knowledge-based companies based in Tehran (90 people) and knowledge-based companies based in Science City and the research was conducted in Isfahan (100 people), which is a total of 190 people. Considering the extent of these organizations, using the stratified sampling method, after dividing the statistical population of this research into two groups, Tehran and Isfahan, the number of samples was determined in proportion to the number of experts in each organization (82 and 68 people, respectively) and then by using the random sampling method and the sampling formula from the limited population and the accuracy of 5%, the number of people is estimated to be 150. Finally, managers and experts were randomly selected. In other words, in the present research, all the managers, specialists and experts familiar with the aforementioned systems in the companies are considered as the statistical population of the research, and the designed questionnaires will be distributed and collected within 2 months. This research was cross-sectional and the situation of the problem was measured in the spring of 2017 and the summer of 2017. Data collection is done by using a questionnaire.
4- RESULTS & DISCUSSION
According to the results of this paper, the value of R2 has been calculated for the endogenous structure of the level of knowledge-based economy (0.527), and the endogenous structure of competitiveness (0.468), which confirms the suitability of the fit of the structural model according to the three criterion values.
According to the obtained values for Q2 of endogenous constructs, it is clear that there is a strong predictive power of the model regarding all constructs and the fit of the structural model of the research is confirmed again.
Finally, after calculating all the fit criteria of the measurement models and the structural model of the research, the overall fit of the model should be calculated. As calculated in the output of the software, the value of GOF equal to 0.293 was obtained, which is a good value and indicates an almost strong fit of the structural model, as a result, the overall fit of the model is also confirmed.
5- CONCLUSIONS & SUGGESTIONS
Considering the confirmation of the main hypothesis, we can conclude that: 1- Access to the government data line has a positive effect on the formation of the knowledge-based economy in Iran. 2- The release of sustainable data collection has a positive effect on the formation of knowledge-based economy in Iran. Comparing the output of this research with other researches, it was found that no research has been done in this regard. On the other hand, the output of this research is consistent with the previous researches.
Considering the results of the research, the following policy recommendations and practical suggestions were presented: 1. Providing the necessary platforms for the dynamic and constructive interaction of our country's industries with regional and international industrial countries; 2. Providing the necessary incentives to attract foreign investment; 3. And applying outward-looking business policies, including basic and basic solutions to improve the competitiveness of our country's knowledge-based industries in global and regional markets; 4. Emphasizing on applied research and facilitating and encouraging the use of scientific findings in the process of globalization of production and trade as practical measures for the simultaneous promotion of knowledge base and development. 5. Providing favorable financial resources, including risk-taking investors, foreign investment and government budgets in order to launch knowledge-based businesses; 6. Providing appropriate infrastructure including telecommunications, information and communication technology, scientific networks; 7. Development of government policies, including business support environment, legal system, tax system and appropriate regulatory policies; 8. Rule the thinking of innovation, invention and creativity in the education system instead of reservations, to encourage the country's young forces to engage in entrepreneurial activities and start knowledge-based businesses.
مقالات پژوهشی
Homeira Beiki Tafti; Samaneh Jalilisadrabad
Abstract
1- INTRODUCTION
Cities usually have diverse and large attractions including museums, monuments, theaters, sports stadiums, manques, amusement parks, shopping centers, areas with historical architecture and places related to important events or famous people, which attract many tourists. Since Yazd province ...
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1- INTRODUCTION
Cities usually have diverse and large attractions including museums, monuments, theaters, sports stadiums, manques, amusement parks, shopping centers, areas with historical architecture and places related to important events or famous people, which attract many tourists. Since Yazd province is one of the most important destinations for domestic and foreign tourists in the country and has a lot of potential in the field of tourism development (especially based on the cultural, heritage and historical capabilities of the city). Despite the many efforts, the prospect of development of tourism in this province is unclear and undefined.
2- THEORETICAL FRAMEWORK
The organization of attracting investment in the tourism industry in the form of an organization and the role of this organization in the development of attracting foreign investment in the tourism industry of countries should be considered. Due to the fact that the regions have many historical and cultural attractions, they are often considered important tourist destinations. Also, in the age of globalization, regional competitiveness has been emphasized as one of the new approaches to regional development. The concept of competitiveness is used by Michael Porter in a wide range from enterprise and industry competitiveness to national and global competitiveness. Today, the importance of this issue has reached the point where the leaders of the countries at the World Economic Forum in Davos evaluate and systematically monitor the competitiveness of their nation and country.
3- METHODOLOGY
The purpose of this research is to discover the relationship between investment and capital attraction in the regional tourism industry and planning to coordinate these relationships to make the region more competitive. The current research is an applied type and it plans for Yazd province by examination the theoretical foundations and extracting common indicators of capital attraction in order to promote regional tourism and regional competitiveness. So, firstly, the indicators of capital attraction were identified in order to promote regional tourism, which is related to regional competitiveness, and in order to check these indicators in Yazd province, the indicators of each component in the projects of Faradast in Yazd province were checked through MAXQDA software, and the level of attention of each plan to each component was determined. Finally, in order to analyze the interrelationships of regional competitiveness components, 5 components were used as input data to MicMAC software. The results show that among the 5 components examined in this research, 2 components have been selected as key factors effective in attracting capital in tourism in order to make a region in Yazd province more competitive.t.
4- RESULTS & DISCUSSION
Among these 2 components, the political and economic management components, which have high influence and the least influence, have been selected as the most effective and key components. Considering that the development plans of Yazd province have paid attention to the economic components to a relatively appropriate extent, but not much attention has been paid to the administrative-political components. Therefore, in order to increase the competitiveness of Yazd province by attracting investment in the tourism industry, it is necessary to improve the indicators of political management components and also pay more attention to economic indicators in Yazd province. Also, by prioritizing the indicators of the economic and political-management components, it was determined that the indicators 1- profit and economic efficiency and currency conversion, 2- correct advertising, 3- coordination of organizations related to tourism affairs, 4- price competitiveness of the travel and tourism industry, and 5_ innovation and creativity, respectively. It has been a priority, and by focusing on these indicators and their improvements, Yazd province will find the ability to compete with other regions from the point of view of attracting investment in tourism.
5- CONCLUSIONS & SUGGESTIONS
The results of our research show that in order to achieve the competitiveness of the region through attracting capital in the tourism industry, we must improve the indicators of the social, economic, physical, environmental, information technology, tourism, transportation and political-management components. However, the most key and main components are the economic and management-political components, which economic component indicators include: the variety and quality of food and beverages, proper advertising, the use of local products, etc. For example, if the variety and quality of food and beverages in an area are promoted can be found and can have a relative advantage in this field and compete with other regions, while the tourism of the region will also be promoted and generate income in this sector. It is also effective for other economic component indicators.
Original Article
Growth and development economics
Mobina Zarei; Seyed Parviz Jalili Kamju; Mahtab Tahmasebi; Ramin Khochiany
Abstract
1-INTRODUCTION
In the economy, education plays an important role in providing highly skilled human capital needed to create jobs, economic growth, and the welfare of individuals and society. Today, most economists believe that the lack of investment in human capital is the main reason for the ...
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1-INTRODUCTION
In the economy, education plays an important role in providing highly skilled human capital needed to create jobs, economic growth, and the welfare of individuals and society. Today, most economists believe that the lack of investment in human capital is the main reason for the low level of economic growth in developing countries, unless these countries use education and knowledge and promote the level of their professional skills. If they do not improve, the productivity and efficiency of labor and capital will remain at a low level and economic growth will be slow and with heavier costs. If the country has the required amount of human capital, it can be said that physical capital will be more productive. Human capital includes education, expertise, skills, and generally the quality of the workforce. Considering that one of the factors influencing the social welfare of countries is achieving a high economic growth rate, the assessment of the causes and factors affecting economic growth is always a special concern of economists, and several growth models have been designed for it.
2- THEORETICAL FRAMEWORK
Undoubtly development is necessary in all societies. Developed and developing countries use the same approach that can only be achieved through educational institutions. Therefore, education plays an effective role in improvement of societies to create continuous development in order to promote social and economic progress. Considering the importance of education costs for the development of countries' economies, it can be said that education costs help create wealth. The argument is that the ability to create, adopt, and improve technological and technical progress is associated with investment in human capital and the functioning of the educational system. Therefore, it is useful for countries to invest significantly in these areas in order to train the workforce and develop the necessary skills to increase economic growth and ensure the success of a country.
ncrease economic growth and ensure the success of a country.
3- MATERIALS & METHODS
The purpose of this research is to evaluate the effect of value-added education, high-level educational expenses and educational quality, trained workforce and capital stock on economic growth among urban households in the provinces of Iran in the period of 2006-2019. This research will use random dynamic panel by application of SAR spatial autoregression generalized moments model and with the use of Arellano-Bauer/Bundle-Band two-stage coefficients in order to estimate the econometric model.
In the spatial econometrics department, by forming the proximity matrix and then standardizing this matrix and finally by multiplying the standardized proximity matrix, a new variable is obtained in the dependent variable vector, which is called the spatial lag variable or the spatial lag variable, and thus with the presence of the lag variable spatial. The spatial econometric model is also dynamically estimated. In summary, all spatial models in the form of a spatial random dynamic panel model (SDPD) are as follows:
4-RESULTS & DISCUSSION
The results obtained from the model indicate that the independent variable of GMM has a positive and significant effect on economic growth, that is, part of the economic growth in these regions is due to their economic growth in the past years. The first spatial interval in the SAR model also has a positive and significant effect on the economic growth of other provinces. The added value of education has a positive and significant effect on economic growth with a coefficient of 0.12, when the added value of education increases, it means that the level of skill, knowledge and talent of the workforce increases, and the structure of the workforce leads to the use of skilled and capable personnel. The effect of human capital on economic growth will increase. Education expenditure also has a positive and significant effect on economic growth with a coefficient of 0.53. One of the ways to increase economic growth is creating a transformation in labor productivity and technological development. Promotion of the level of education requires investment in education and increasing educational facilities. Skilled and thoughtful manpower causes the development and expansion of the technologies produced and as the foundation of economic progress and development in the society, and thus by raising the level of education in the society, growth, the economy also increases. In Smith's main growth equation, labor force, land and capital stock are the main factors of production. Adam Smith explains growth as an endogenous phenomenon, according his point of view, economic growth depends on the decision and action of economic agents, especially their savings and investment behavior. Therefore, the capital stock has a positive and significant effect on economic growth with a coefficient of 0.0001, and the more the capital stock increases, the economic growth also increases. The labor force also has a positive effect on the economic growth of households by increasing it by a factor of 0.25. بیش ا
5- CONCLUSIONS
Based on the discussions of the theoretical foundations and according to the results obtained from the model, it shows that the workforce and the quality of education have a stronger effect on economic growth than the capital stock. In other words, it can be said that economic growth is strongly influenced by the human capital of workers. Therefore, the government should allocate more funds to the education and training organization. Hence the education and training should improve the quality of its schools in various scientific fields, as well as the higher education should raise the quality level of universities in the regions and provinces, especially the deprived areas, and the graduates, in addition to obtaining a degree from their abilities and skills. It is necessary for them to benefit in their educational fields and be able to move them from traditional methods to advanced and modern methods by entering the industry and agriculture sectors and be able to bring their province to high economic growth and development. According to the first spatial break of SAR, the increase in economic growth and development in one province leads to the spillover of economic growth and development to the neighbors’ provinces.
Original Article
E-Commerce
Ali Alivar; Mohammad Reza Armanmehr; Mohammad Mirbagherijam
Abstract
1- INTRODUCTION
E-Commerce plays a fundamental role in the global economy and has a significant impact on the growth of countries. This area has far-reaching impacts on social activities such as retail, healthcare services, financial services, manufacturing and etc. E-Commerce is observed as ...
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1- INTRODUCTION
E-Commerce plays a fundamental role in the global economy and has a significant impact on the growth of countries. This area has far-reaching impacts on social activities such as retail, healthcare services, financial services, manufacturing and etc. E-Commerce is observed as a driver of future economic growth and is attributed to its new communication channels and constant accessibility. In Iran, this sector is growing, but the country's share of E-Commerce sales in the region is relatively small. According to the 2019 UNCTAD report, Iran's share of E-Commerce sales was only 7%, and the country ranked 42nd out of 152 countries in the E-Commerce sector. Therefore, in order to promote E-Commerce in the country, this research models the behavior of the E-Commerce system in Iran by integrating econometric and dynamic systems approaches. The aim is to simulate and evaluate the influencing variables on E-Commerce development, quantify the effects of the factors and clarify the obstacles to E-Commerce development in the country.
2- THEORETICAL FRAMEWORK
Several factors influence the adoption and development of E-Commerce, and categorizing them helps to understand and expand the mental model of E-Commerce development. Examples of influencing factors in E-Commerce development are trust in the E-Commerce system, security of the information exchange space, service quality, and information quality and system infrastructure quality, customer satisfaction, advertising, public awarenes, technology usage level and education and learning in E-Commerce. In this study, the factors affecting E-Commerce development in the country are divided into four groups: 1 – infrastructure, 2 – security and privacy, 3 – quality and benefits of E-Commerce, and 4 – trust and customer satisfaction. These factors are identified and classified in the study's conceptual model, with these four categories representing the most critical components of the dynamic E-Commerce system.
Based on previous studies, positive and crucial factors in E-Commerce include information availability and quality, awareness and information dissemination, infrastructure improvement, and culture promotion for the use of technology, improved education, electronic trust, perceived security, information quality and product variety, use of specialized information platforms, secure payment systems, advertising, government infrastructure support for E-Commerce, computer literacy and internet literacy. On the other hand, the barriers to lower acceptance of E-Commerce in society include legal problems and tax evasion, lack of technology infrastructure and the inconsistency of economic policies with the development of the e-economy.
3- METHODOLOGY
System dynamics aims at an internal interpretation of the causes of phenomena and system dynamics is one of the best scientific methods for modeling complex, dynamic and nonlinear systems. For this reason, the research methodology for identifying and modeling the factors affecting the development of electronic commerce in the country is a combination of systems approach and econometrics. The modeling uses time series data collected by the Statistical Center of Iran and other reliable statistical sources from 2006 to 2021, and the research model's predictions extend to the year 2031. The estimate of per capita income from electronic commerce in the dynamic model was performed with a multivariate regression model. The limit of the dynamic model for the development of electronic commerce is determined by the selection of endogenous and exogenous variables. To illustrate the system feedback, causal loop diagrams and state flow diagrams of the dynamic model are created by using Vensim software. The dynamic hypotheses of the research are validated by three tests: the reference behavior test, the extreme condition test and the sensitivity analysis test. After validating the model, policymaking will be carried out in two scenarios: increasing advertising and increasing government support for infrastructure development until 2031.
4- RESULTS & DISCUSSION
The results of the reference behavior, extreme conditions and sensitivity analysis confirm the validity and accuracy of the dynamic model in research. The evaluation of the research hypotheses suggests that an increase in public awareness leads to a growth in the number of E-Commerce providers. In addition, as system quality increases, the number of E-Commerce providers increases exponentially. The increase in E-Commerce revenue also leads to a logarithmic growth in the number of providers.
The scenario analysis under the dynamic system model of E-Commerce development shows that doubling advertising leads to a 2.2% increase in vendors, while tripling advertising leads to a 6.2% increase. It is observed that advertising promotes the development of E-Commerce as an increase in advertising leads to increased public awareness, which ultimately leads to an increase in the number of consumers and therefore an increase in the number of E-Commerce provider’s leads. In the second scenario, a doubling of government support for infrastructure development leads to an increase in suppliers by 3.2%, and with a tripling of government support, suppliers increase by 4.2%, which contributes to the development of E-Commerce. This is due to the fact that increased government support for infrastructure leads to improved infrastructure quality, increased efficiency, security of information sharing and public trust. Increased trust leads to an increase in the number of buyers and an increase in E-Commerce providers.
5- CONCLUSIONS & SUGGESTIONS
Increasing awareness among government, entrepreneurs and society will lead to further growth in E-Commerce offerings over time. Consequently, cultural, educational and support efforts are needed to develop and promote the use of E-Commerce in the country. The Iranian economoy and trade structure as well as the knowledge gap in technology have hindered the private sector from synchronizing with the developments and sustainably establishing E-Commerce in the country. Therefore, government policymaking and support are crucial to improve the quality of the E-Commerce system in Iran. The increase in sales through E-Commerce leads to an increase in E-Commerce providers. Efforts to support the market and expand electronic infrastructure are therefore also recommended.
Original Article
International Economics
Abolghasem Golkhandan; Sahebe Mohamadian Mansour
Abstract
1- INTRODUCTION
Globalization has been rising over the years and the trend seems perpetual. Ideas, technology, resources and final goods are progressively mobile across international borders. Consequently, the economic conditions in most developing countries are not exclusively decided by internal ...
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1- INTRODUCTION
Globalization has been rising over the years and the trend seems perpetual. Ideas, technology, resources and final goods are progressively mobile across international borders. Consequently, the economic conditions in most developing countries are not exclusively decided by internal policies and market situations. The world continues to witness intensified interdependence and competition between economies in addition to more benefits to developing countries in terms of more access to international markets, intensify technology transfer from more developed nations. On the other hand, nowadays militarization continues under the impact of technological advances, infrastructural development, geopolitical competition and growth in troop size. In this regard, one of the important economic debates is whether globalization leads to the expansion of militarization (positive causality from globalization to militarization) or helps to control it and promote peace (negative causality from globalization to militarization)? Or vice versa, is it the militarization that slows down the process of globalization (negative causality from militarization to globalization) or does it enable the presence in international markets (positive causality from militarization to globalization)?
According to these points, the aim of this paper is to examine the causality between globalization and militarization for the 12 Middle East countries that have the highest level of militarization in this region over the period 2000-2020.
2- THEORETICAL FRAMEWORK
There are arguments in favour of positive impact of globalisation on military expenditure. For instance, it is argued that globalisation stimulates defense spending over social expenditure. Moreover, security concessions in free trade arrangements makes it easy for governments to expand military expenditure, but put restrictions on social expenditure. There are arguments in favour of the negative impact of globalisation on military spending. It is opined that military expenditure should fall significantly due to economic liberalisation and globalization. With the rising quest for the acquisition of wealth through trade and economic liberalisation, countries are progressively hesitant to use military means to resolve inter-state disputes. Furthermore, with the emergence of the unparalleled forces of globalisation, particularly after the Cold War ended, the function of the state as provider of security is believed to be on the decrease.
Moreover, the reverse causation can also be applicable that is, in the presence of conflict and civil war the governments increase their military expenditures in order to promote the nation state and enhancing their territorial jurisdictions. As a result, internationalization or global integration needs to be forgone. In contrast to the increase in militarization due to the need to import technology and advanced weapons as well as the export of manufactured weapons, it enables the presence in international markets, which leads to the improvement of the level of globalization.
3- METHODOLOGY
The data used in this study covers the period 2000–2020 for the 12 Middle East countries that have the highest level of militarization in this region (Turkey, UAE, Egypt, Iran, Iraq, Lebanon, Jordan, Bahrain, Saudi Arabia, Kuwait, Oman and Israel). The chosen time period stems from the availability of data. The variables used in this study include the global militarization index (MIL), the overall globalization index (GLOB), and per capita real GDP (GDPC) as a control variable. The overall globalization index includes economic, social, and political globalization. The economic globalization (36%) consists of actual flows, trade and capital account restrictions. The social globalization (38%) involves data on personal contact, information flows, and cultural proximity. The political globalization (26%) consists of number of embassies in the country, membership in international organizations, participation in UN security-council missions, and international treaties. The variables are expressed in log forms. Data is obtained from the World Bank’s World Development Indicators, KOF Swiss Economic Institute’s overall globalization index, and Bonn International Center for Conversation (BICC).
The estimation of the model has also been done by using the causality test in heterogeneous mixed panels (Presented by Emirmahmutoglu & Kose (2011)), which is based on the Vector Auto Regressive (VAR) model and Wald tests with specific bootstrap critical values for each country. The panel causality method presented by Emirmahmutoglu & Kose (2011) consists of a system, including two sets of equations as follows:
(1)
and
(2)
In the above relationship, y indicates globalization and x refers to militarization. N is the number of panel members (j=1,..,N), t is the time period (t=1,..,T), l is the optimal lag length and is the maximum degree of stationary of the model variables between each of the panel members. To test for Granger causality in this system, alternative causal relations for each country are likely to be found: (1) there is one-way Granger causality from X to Y if not all are zero, but all are zero; (2) there is one-way Granger causality from Y to X if all are zero, but not all are zero; (3) there is two-way Granger causality between X and Y if neither nor are zero; and (4) there is no Granger causality between X and Y if all and are zero.
4- RESULTS & DISCUSSION
Empirical results show the existence of a positive one-way causality relationship from the side of militarization to globalization (the hypothesis of militarization leading to an increase in globalization) in Egypt and Israel, a negative one-way causality relationship from the side of militarization to globalization (the hypothesis of militarization leading to a decrease in globalization) in the countries of Turkey and the UAE, a negative one-way causality relationship from globalization to militarization (hypothesis of globalization leads to limiting militarization) in the country of Oman, a negative two-way causality relationship between militarization and globalization (feedback hypothesis) in the country of Kuwait and non-causality relationship between militarization and globalization (neutral hypothesis) for the countries of Iran, Iraq, Lebanon, Jordan, Bahrain and Saudi Arabia. Also, the non-causality relationship between globalization and militarization (or the neutral hypothesis) is confirmed for the total panel.
5- CONCLUSIONS & SUGGESTIONS
In general, based on the results, it can be said that globalization does not affect the process of militarization in the countries of the Middle East region and is not a threat to security in the countries of this region. Therefore, through globalization and moving towards an open economy, the countries of this region can provide the necessary platforms for things like attracting technology, capital and financial resources, regional and global arrangements, and joint investment in the fields of knowledge; Without this issue being a serious threat to security and the level of militarization in the Middle East region. Also, it is suggested that in the future studies, a more detailed examination of the research subject will be done by separating globalization into economic, political and social globalization types.
