| Economic growth, as one of the most important indicators of a country’s economic performance, reflects a sustained increase in the level of welfare and is influenced by a set of macroeconomic variables. The present study investigates the dynamic effects of foreign direct investment (FDI) and trade openness on economic growth and energy consumption in Iran over the time period from 1990 to 2023. The research methodology is based on the ARDL (Autoregressive Distributed Lag) approach, with the following variables under investigation: Gross Domestic Product (GDP), energy consumption, foreign direct investment, trade openness index, oil rents, inflation rate, and exchange rate. The main findings of the study indicate that foreign direct investment, the trade openness index, and oil rents have positive and statistically significant impacts on economic growth in both the long-run and short-run (with smaller coefficients in the short-run). Additionally, FDI and trade openness exert a stimulating (positive and significant) effect on energy consumption in the long-run, although this impact is weaker in the short-term. Control variables such as inflation rate and exchange rate also play a significant (negative and meaningful) role in determining the pattern of energy consumption. Based on these findings, it is recommended that attracting foreign capital and increasing trade openness should be considered among the key strategies for achieving sustainable economic growth and managing energy consumption in Iran. Policymakers should create an enabling environment for attracting foreign investment and facilitating international trade, while simultaneously placing energy consumption management programs on the agenda to strengthen economic growth. |
