The impact of economic sanctions on foreign direct investment in Iran: A fuzzy approach

Subject Areas : International Economics

Mostafa Elmimoghaddam ¹ , Mostafa Shokri ² , Yaqub Mahmoudian ³

1 - Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran, Email: [e-mail]
2 - PhD in International Economics, Tabriz University, Tabriz, Iran. (Corresponding Author), Email: [e-mail]
3 - Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran, Email: [e-mail]

Received: 2023-06-13 Accepted : 2023-12-13 Published : 2024-02-10

Keywords: Iran, C13, F21, Foreign Direct Investment, Economic Sanctions, F51, Fuzzy Approach. JEL Classification: B22,

Abstract :

Foreign direct investment stands as a crucial economic variable, influenced by various factors that contribute to its attraction. Empirical studies reveal that both visible and invisible elements play a role in shaping FDI in any given country, often eluding straightforward inclusion in economic models. This research, recognizing the significance of this subject, delves into the impact of economic sanctions on the attraction of foreign direct investment in Iran over 44 years, employing a fuzzy approach. The findings underscore the substantial and moderate economic sanctions, characterized by high and robust fuzzy coefficients, exerting a notable negative effect on the allure of foreign direct investment in Iran. Additionally, the study reveals that variables such as the budget deficit, inflation rate, mild economic sanctions, adverse exchange rates, alongside factors like gross domestic product, economic openness, domestic interest rates, foreign direct investment with interruptions, governance quality index, and the effective tax rate on company profits, have exhibited a positive influence on the attraction of foreign direct investment in Iran.

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