Evaluating the Impact of  Sanctions on Foreign Investment in  Industry  Joint Venture Contracts

Mousavi, Seyed Ali Asghar; Mohseni, Reza; Dashtbany, Yavar

doi:10.30473/jier.2024.71492.1456

Document Type : applicative

Authors

¹ Ph.D of Economics, Strategic Management Faculty, Supreme National Defence University, Tehran, Iran.

² Assistant Professor in Economics, Economics & Political Sciences Faculty, Shahid Beheshti University, Tehran, Iran.

³ Ph.D. of Economics, Department of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.

10.30473/jier.2024.71492.1456

Abstract

The realization of foreign direct investment in the form of joint venture contracts, with many benefits for the host country, requires the necessary alignment between two economies (the country of origin and host) with different characteristics. According to the theoretical literature, it is expected that the sanction of the host country as a factor of increasing risk and uncertainty has a positive effect on attracting foreign investment in the form of joint ventures, but its effect can be decreased by factors such as the weakness of the legal infrastructure and transparent legal procedures of the host country. In the present study, an appropriate framework is investigated for attracting foreign direct investment based on partnership with local investors under the conditions of Iran’s industry sanction. This study was done using the Bayesian vector autoregression (BVAR) model. Based on the results of this study, a substantial difference in the investment behavior of the developed countries' subsidiary companies and the subsidiaries companies and individuals of the developing countries in the region is evident. According to the results, the sanction of the host country causes a decrease in the desire to enter the industry sector in the form of joint investment, but its effect depends on the effect of other variables such as market size, governance efficiency and commercial openness on the attracting foreign direct investment in the form of Joint venture is less.

Keywords

Main Subjects

Industrial Economics, Structure_Conduct-Performance

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Journal of Industrial Economics researches

Evaluating the Impact of Sanctions on Foreign Investment in Industry Joint Venture Contracts

References

References

Volume 8, Issue 27
April 2024
Pages 31-45

Evaluating the Impact of Sanctions on Foreign Investment in Industry Joint Venture Contracts

References

References

Volume 8, Issue 27April 2024Pages 31-45

Volume 8, Issue 27
April 2024
Pages 31-45