An Investigation of the effects of transportation infrastructure on foreign direct investment in Iran (5874-2117)

Subject Areas : Financial Economics

Armin Rajabzadeh ¹ , Mina Mahjoub laleh ² , Mohammad Reza Abbasi Astamal ³

1 - Department of Marketing Management, Payame Noor University, PO BOX 59391-3993 Tehran, Iran.
2 - Department of Economic, Islamic Azad University, Tabriz Branch, Iran.
3 - Department of Accounting, Islamic Azad University, Varzeghan Branch, Iran.

Received: 2015-06-11 Accepted : 2015-06-11 Published : 2009-06-22

Keywords: Error correction, Transportation, Foreign Direct Investment, market size, openness, Co integration,

Abstract :

Strong infrastructure cause reduction in transportation costs that this reduction is a motivation for entering regional and multinational firms and attraction of foreign investment. The aim of this research is to study the effect of transportation infrastructure on foreign direct investment in Iran during 5874-2117. By using time series econometric measuring; Johansen Co integration method the long-run relationship has been investigated and according to Error Correction method the short-run relations have been studied. The results show that transportation infrastructure has significantly and positive effect on foreign direct investment by coefficient of 2ه22. But in short-run there is no causative relationship between capital stock of transportation on foreign direct investment