توسعه مالی
Farshid Pourshahabi; Marzie Esfandiari
Volume 7, Issue 28 , September 2017, , Pages 113-126
Abstract
Economic growth has always been an important objective of policy in different countries. In developing countries including Iran, to achieving a reasonable rate of economic growth is essential. Since developing countries are facing with low efficiency of investment due to technological backwardness, so ...
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Economic growth has always been an important objective of policy in different countries. In developing countries including Iran, to achieving a reasonable rate of economic growth is essential. Since developing countries are facing with low efficiency of investment due to technological backwardness, so this set of countries would be taking advantage from foreign direct investment (FDI) as a source of capital accumulation and promote economic growth. Iran has a good potential for utilization of this resource considering to entering the field of FDI after the implementation of the nuclear deal. But the impact of FDI on economic growth needs required fields, including the host country's financial development. Therefore, in this study financial development as an important variable in the FDI inflow and economic growth is considered. The results for 10 developing Asian countries including Iran in the period 1996-2013 indicate that financial development has a determining effect on FDI inflow to the set of countries, but this is not enough and political stability is essential for FDI inflow. Also, the results indicate that although FDI has a positive and significant effect on economic growth in these set of countries, but financial development has a deterrent effect on economic growth of these countries due to the weak institutions and inefficiency in the allocation of funds.
