Preprint Article Version 2 Preserved in Portico This version is not peer-reviewed

Role of Sanctions and Macroeconomic Determinants on FDI Inflow: A Case Study

Version 1 : Received: 27 November 2019 / Approved: 28 November 2019 / Online: 28 November 2019 (09:45:49 CET)
Version 2 : Received: 9 April 2020 / Approved: 9 April 2020 / Online: 9 April 2020 (09:55:45 CEST)

How to cite: Rasouli Ghahroudi, M.; Chong, L.C. Role of Sanctions and Macroeconomic Determinants on FDI Inflow: A Case Study. Preprints 2019, 2019110357. https://doi.org/10.20944/preprints201911.0357.v2 Rasouli Ghahroudi, M.; Chong, L.C. Role of Sanctions and Macroeconomic Determinants on FDI Inflow: A Case Study. Preprints 2019, 2019110357. https://doi.org/10.20944/preprints201911.0357.v2

Abstract

In this paper, we investigate the role of sanctions in the relationship between macroeconomic determinants and foreign direct investment inflows. We also investigate the moderating role of sanctions in FDI inflows into Iran. The empirical results reveal that macro determinants such as infrastructure, exchange rate, inflation rate, investment return, and governance have a long-run impact on FDI inflows in Iran. Our findings also show that GDP growth rate and trade openness have no significant effect on FDI. Our results indicate that sanctions do not have a significant moderating role in the relationship between macroeconomic factors and foreign direct investment. Surprisingly, international sanctions have a positive relationship with FDI inflows in Iran. Furthermore, sanction has a positive impact on the inflation rate and exchange rate in Iran. Finally, our findings show that sanctions have had a significant impact on Iran's economic growth in recent years due to increasing the severity level of sanctions.

Keywords

FDI inflows; sanctions; political stability; macroeconomic factors; GDP growth; Iran

Subject

Business, Economics and Management, Economics

Comments (1)

Comment 1
Received: 9 April 2020
Commenter: Mehdi Rasouli Ghahroudi
Commenter's Conflict of Interests: Author
Comment: The title, abstract and introduction have been changed. The first name of second author has also been corrected.
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