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Estimating the impact of financing methods by separating Transactional Loans, Partnership Loans and Capital increase on the value added of the Iran's provinces (2011-2020 period)

Document Type : applicative

Authors

1 Board member of Economics faculty

2 Monetary and Banking Research Institute of the Central Bank

10.30473/jier.2025.72608.1469

Abstract

In the decade of 2011-2020, the Iranian economy faced an average economic growth rate close to zero due to economic sanctions, inefficient management, low productivity, and inappropriate economic policies. In this regard, the country's monetary policymakers tried to support production by using the tool of payment of loans for increase the country's  value added. The main issue of the present study is whether the payment of these loans by the banking industry has increased the value  added of the country's provinces? Since the payment loans were in two forms:  Transactional contracts (Murabahah, installment sale, lease with condition of ownership, Salaf, purchase of religion, Ja'ala and Istisna) and partnership (Incorporating) contracts (civil partnership, legal partnership, Mudaraba, Mazareh and Musaqat), was there a statistically significant difference between the impact coefficient of these two groups? According to theoretical expectations, have cooperative loans, which are long-term in nature, provide capital, and have a direct effect on the production and services, had a greater impact on the growth of value added in different provinces compared to Transactional loans, which are short-term in nature, are intermediary with the possibility of determining the interest rate in advance, and have an effect on the demand for goods and services? Based on two different perspectives, Keynesian and classical, is money neutral according to the classical perspective and cannot cause production growth, but will only affect the inflation rate, or according to the Keynesian perspective, can monetary policy tools and the creation and payment of bank credits in the money market cause production and value added growth through the expenditure channel? To answer these questions, which form the same research hypotheses, the econometric estimation method using the panel data method was used, and each provincial statistics including real value added, capital (Capital of stock exchange companiesc in each province from 2011-2020), employed labor, and balance of loans with Partnership and Transactional contracts were collected and used in the estimation. According to the research results, the most important factor affecting the value added of the provinces was the variable Kt (the supply of goods and volume of accumulated capital of listed companies). Contrary to the research hypothesis that partnership loans are more effective than Transactional loans, there is no difference between these two groups except when it is converted into the capital variable (Kt) and appears in the financial statements of the companies as an effective production factor.

Keywords

Main Subjects

References
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Journal of Industrial Economics researches
Volume 8, Issue 28
June 2025
Pages 107-124
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History
  • Receive Date: 31 October 2024
  • Revise Date: 15 January 2025
  • Accept Date: 17 May 2025
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