An analysis of the effects of globalization and financial development on Iran's economic growth

اقتصاد پولی مالی

Articles in Press, Accepted Manuscript, Available Online from 17 September 2025

Document Type: Original Article

DOI: 10.22067/mfe.2025.91474.1489

Authors

Saad Qais Abdulqader Alatbee¹; Seyed kamal Sadeghi^{* 2}

¹Tabriz University

²Professor of Economics, Economic Development and Planning Group, Faculty of Economics and management, University of Tabriz, Tabriz, Iran,

Abstract

Given the numerous challenges facing the Iranian economy, globalization and financial development are considered as two key factors in the country's economic growth process. This study examines the effects of globalization and financial development on Iran's economic growth. The main objective of this research is to create an analytical framework and model to calculate total factor productivity (TFP) and examine the effects of these two variables on Iran's gross domestic product (GDP). The data used were collected from 2000 to 2023 and include key variables such as physical capital, financial development, globalization index, government spending, and inflation rate. Advanced econometric methods such as the ARDL model and static and cointegration tests were used to analyze the data, which allows for a detailed examination of the long-term and short-term relationships between the variables. The results of the research show that globalization and financial development have a positive and significant effect on Iran's economic growth and can act as the main drivers in this process. In contrast, government spending and inflation rate have negative effects on economic growth, and these results indicate the need for optimal management of government spending and control of inflation rate to maintain economic stability. These findings can help policymakers and economic decision-makers in designing effective and efficient strategies and lead to improvement of the country's economic situation.

Keywords

Globalization; Financial development; Government expenditure; Inflation rate

References