Institute for Management and Planning studies 3115-7092 3115-7106 22 4 2018 3 1 Bank- Firm Relationships: The Case of Iranian Listed Companies 3 34 FA Ali Madanizadeh Sharif University of Technology madanizadeh@sharif.edu N Sajad Ebrahimi Monetary and Banking Research Institute s.ebrahimi@mbri.ac.ir Y Amineh Mahmoudzadeh Sharif University of Technology, Tehran, Iran. a_mahmoudzadeh@gsme.sharif.edum N Since the main source of finance for the Iranian manufacturing firms is the bank loan, the bank-firm relationship plays an important role in their performance. In effect, firms with decent financial potency regularly have a better chance to access high-quality and less costly finances. In this paper, we investigate the bank-firm relationship and its determinant factors by using a unique database that includes the listed companies’ outstanding loans with the details of the lending banks over the period of 2007-2014. In this regard, the main bank share, number of bank creditors, concentration index, the share of private banks, and length of relationship with the main bank are defined as selected indexes for the bank-firm relationship. According to the research findings, firms with lower liquidity risk and better financial ratio can access the loan with better quality and lower costs. Moreover, the regression results indicate that the share of the private banks’ loan is higher for firms with poor liquidity condition. Moreover, loans in the firms with higher cash flow are more concentrated to a few creditors. In addition, an increase in the size of firms is positively correlated with the share of the private banks’ loan and the number of creditors. Bank Loan, Firms, Financial Risk, Financing, Creditor http://eprj.ir/article-1-1598-en.html http://eprj.ir/article-1-1598-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 22 4 2018 3 1 Fiscal Illusion in Iranian Economy Emphasizing the Five-Dimensional Indicators and the NARDL Approach 35 80 FA Shahryar Zaroki University of Mazandaran, Mazandaran, Iran sh.zaroki@umz.ac.ir Y Hosna Ezoji University of Mazandaran, Mazandaran, Iran hosnaezoji@gmail.com N The phenomenon of fiscal illusion has always been an intriguing topic in the public finance literature. Fiscal illusion is a concept in which misinterpretation of fiscal parameters and tax expenses and liabilities lead to bias in budgetary decision making at all levels of the government. The current research presents an empirical analysis of the fiscal illusion in the Iranian economy, using five-dimensional indicators of fiscal illusion. For this purpose, the monthly data from 2001ا-2017 and the linear and Nonlinear Autoregressive Distributed Lag approach have been used. Overall, the results suggest that a nonlinear approach, compared to a linear approach, can provide a better explanation of fiscal illusion in the Iranian economy. Therefore, while confirming the existence of asymmetric effects of the explanatory indicators of fiscal illusion, it is emphasized that there is a fiscal illusion whenever there is an increase or decrease in the desired indicators. The fiscal illusion is confirmed based on the positive decomposition of the deficit illusion index, the negative decomposition of the first index of elasticity illusion (a decreasing trend in the ratio of income tax to total government revenues), the negative decomposition of the complexity index, the negative decomposition of debt illusion index, and the negative and positive decomposition of second index of elasticity illusion (the ratio of indirect tax to direct tax). Also, the results for real exchange rate in the nonlinear estimation show that this factor is associated with asymmetric effects. So, in short-run, the real government spending increases when real exchange rate decreases. Fiscal Illusion, Tax, Government Expenditure, Asymmetric Approach, Iran. http://eprj.ir/article-1-1632-en.html http://eprj.ir/article-1-1632-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 22 4 2018 3 1 Statistics Orders and Determinant Factors in Tariffs in Iran 81 100 FA Hanifa Pilvar Sharif University h.pilvar@hss18.qmul.ac.uk N Kowsar Yousefi IMPS K.Yousefi@imps.ac.ir Y Import tariffs are set based on the following factors: terms of trade, government revenue, trade agreements, trade protection, and political economy. This study attempts to evaluate the explanatory power of these factors in influencing the import tariffs in Iran. The data sources that have been used in this study are: Iran’s custom, import and export regulation book, survey of industrial plants, and WITS. Our final data is a panel of industries disaggregated at 4digits of ISIC codes. In our OLS model, the industries’ fixed effects are controlled; Other control variables are employment, value added, and tariffs of the same industries in other countries, export indices, and government income. Results indicate that tariffs are positively correlated with sectors’ employment and added-value shares. We also document that, after controlling value added and employment, about 60% of tariffs’ cross variation could be explained by dummy variables pertaining to industries. This finding may imply an “implicit” industrial plan, which imposes higher protection for some sectors. Finally, about 20% of the tariffs variation cannot be explained through the model, which might be due to data errors, miss-specification, or, political economy (lobbying). The share of each of those factors can be further investigated in future studies. Import Tariffs, Tariffs, Tariff Protection, Employment, Value Added. http://eprj.ir/article-1-1461-en.html http://eprj.ir/article-1-1461-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 22 4 2018 3 1 Determining the Capacity of Creating Employment in Different Economic Sectors to Achieve the Purposes of the Sixth Development Plan Using the input-Output Approach 101 123 FA Mohsen Joodaki Imam Sadiq University joodaki313@gmail.com Y Mohammad Jamour Imam Sadiq University mjamour1373@gmail.com N Mahdi Sadiqi Shahdani Faculty of Islamic Knowledge and Economics, Imam Sadiq University shahdani@yahoo.com N Nowadays unemployment has become one of the most important issues and challenges of Iran`s economy. In order to achieve the goals of the Sixth Development Plan, annual job creation of 952,379 people is required. Given the lack of government resources and the need for their optimal allocation, identifying the most effective way to realize this job creation is the aim of this research. According the to accountability method, after aggregating and updating the output table of 1390 through the Ross method, the employment rate of each sector was extracted for a unit change in the final demand. Then, according to the employment rate, the relative importance of the sectors was determined and finally; in order to achieve the employment rate of 952,379 people per year, the adjusted relative importance was calculated, and at the end, the employment growth rate of each sector was obtained. The results of this study indicate that as for sectoral employment growth, the sectors of public, social, personal and household services, administrative and support services, education, construction, wholesale and retail sales, repair of vehicles and goods, public administration and urban services, with a growth rate of employment of 39/7, 27/6, 26/6, 01/5, 80/4, 77/4, respectively, had the highest growth rate of employment. But in terms of the number of people employed in each sector, which predicates on the number of people working in that sector, agriculture, hunting, forestry and fishing, wholesaling and retailing, repairing vehicles and goods, building, transportation, warehousing, and industry; respectively, with 187868, 157512, 141240,88288 and 77415 working people added, have the highest rate of job creation. These findings can inspire policymakers for furthering and promoting their policies to achieve the employment objective of the sixth plan. Unemployment, I-O Table, Employment, 6th Development Plan, Key Sectors, Direct and Indirect Employment http://eprj.ir/article-1-1627-en.html http://eprj.ir/article-1-1627-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 22 4 2018 3 1 The Effect of Openness on Corruption in the Selected MENA Countries 125 146 FA Mohammadreza Kohansal Ferdowsi University of Mashhad, Mashhad, Iran Kohansal@um.ac.ir Y Milad Aminizadeh Ferdowsi University of Mashhad, Mashhad, Iran. Milad.aminizadeh@mail.um.ac.ir N Corruption is one of the most important determinant factors in economic fields, specifically in trade; and nowadays, it is crucial to know what factors reinforce or mitigate it. Trade openness is an influencing factor on corruption, and the extant literature has two different general perspectives facing that. The first perspective emphasizes that openness has a negative impact on corruption, while the second idea believes that such impact is positive. Hence, the aim of this paper is to answer this question: “what is the effect of openness on corruption in selected MENA countries?” To this end, our analysis is based on panel data that covered 10 MENA countries for 2003–2014. The results indicate that, along with the negative effect of per capita income and institutional quality such as ruling law, political stability and regulation quality, the effect of openness is also negative and significant. In other words, increase and expansion of trade and creating a competitive environment, as well as interacting with countries with systemic structure and less corruption, contributes to improving the institutional and legal environment in the MENA countries, so that, consequently, corruption would decrease. Accordingly, since the rank of Iran in openness and corruption is tenth and second among ten countries respectively, it is recommended that reducing trade barriers such as import tariff and creating a free market, would result in the fall of corruption through reducing monopoly rents of authorities in the field of trade, especially in imports. Openness, Corruption, MENA Countries, Panel Data, Ruling Law, Political Stability, Law Quality http://eprj.ir/article-1-1467-en.html http://eprj.ir/article-1-1467-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 22 4 2018 3 1 Composition of Government Spending, Optimal Fiscal Policy, and Endogenous Growth in the Economy of Iran 147 167 FA Mahdi Seyedkazemi Islamic Azad University, Science and Research Branch Tehran (Kerman) mseyedkazemi2013@gmail.com Y Mohsen Zayanderoodi Department of Economics, Islamic Azad University, Kerman mroody@yahoo.com N Abdolmajid Jalali Department of Economics, Shahid Bahonar University of Kerman jalaee@uk.ac.ir N This paper investigates the optimal fiscal policy, pertaining to government spending, considering different productivity of public services in production function and its impact on the optimal tax rate, the optimal rate of government spending, and optimal economic growth rate. Using the VECM model for Iranian economy over 48 years, results show while the current expenditure has a positive and significant impact on the optimal economic growth rate, capital expenditure has a negative and significant impact on the rate. In other words, since current expenditures result in an increase in consumer demand in the market, it is more productive in production function; However, such impact of current expenditures is only significant in the long-run. The findings also show that an increase in capital expenditure will increase the optimal rate of tax. Also, an increase of current expenditure ratio decreases the optimal share of current expenditure relative to capital expenditures Optimal Fiscal Policy, Economic Growth, Optimal Government Expenditure, VECM Model, Economy Iran http://eprj.ir/article-1-1498-en.html http://eprj.ir/article-1-1498-en.pdf