The Enforcement Targeted Subsidies Law and Its Impact on the Economic Structure of Production

Document Type : Scientific paper

Authors

1 Department of Economics, Faculty of Economics, Management & Accounting, Yazd University, Yazd, Iran.

2 MA in Economics, Yazd University,Yazd, Iran

Abstract

The enforcement of targeted subsidies Law as the most sensitive economic reform program, has had very different and unknown effects on various economic dimensions and it continues. this research evaluate the effects of this law enforcement on the changes of the economic structure of production in Iran. To achieve this purpose in this research, used the time series data during the period of 1996-2017, and econometric models with DVRM approach. In this approach is examined the effects of the enforcement of targeted subsidies Law on the economic structure of production, and share of different sectors included agriculture, industry & mine, services and oil sectors in gross domestic product. The results is indicated that, before the enforcement of targeted subsidies Law (1996-2009), the average share of production of agriculture, industry & mine, services and oil sectors was about 12, 22, 52, and 14 percentage respectively. Basically on this results, after the enforcement of this law (2010-2017), the share of production from GDP in agriculture and industry & mine sectors has decreased to 5 and 0.2 percentage and for services and oil sectors has increased to 4.2 and 0.1 percentage respectively.The results of statistical tests rejected this changes and imply that the enforcement of this law, hasn’t had a significant effect on the economic structure of production. Obviously, the analysis of the long-term effects of the enforcement of this law on the economic structure of production requires to pass the time, and access to wider time series data.

Keywords

References

Ahangari, A. & Khorramzadeh, A. (2012). Investigation the Effect of Structural Changes on GDP in Iran: with Emphasis on Product, Export and Labour Productivity. Quarterly Journal of Quantitative Economics (Quarterly Journal of Economic Studies), 9(1), 71-88. [In Persian]
Ahmadpour Borazjani, M & Sabouhi Sabouni, M. (2015).The Impact of Iranian Subsidies Targeted Plan on Agricultural Sector (Regional Agricultural Sector Modeling). Quarterly Journal of Economic Research (Sustainable Growth and Development), 15(2), 157-182. [In Persian]
Alizadeh, M. (2010). The Effects of Implementing the “Targeted Subsidies” Act on the Economy of Country. Urban Economy, 2(8), 96-107. [In Persian]
Basurto, M. P., Dupas, P, & Robinson, J. (2017). Decentralization and Efficiency of Subsidy Targeting: Evidence from Chiefs in Rural Malawi (No. w23383). National Bureau of Economic Research.
Cin, B. C., Kim, Y. J., & Vonortas, N. S. (2017). The Impact of Public R&D Subsidy on Small firm Productivity: Evidence from Korean SMEs. Small Business Economics, 48(2), 345-360.
Fanni, M. A, Hadian, E & Samadi, A. H (2016). An Evaluation of the Structure of Iran’s Economy Based on Sustainable Development Approach. Strategic Studies Quarterly, 19(71), 7-42. [In Persian]
Fotros, M. H, & Rasuli, M. (2014). Calculating the Index of Economic Structural Changes in Iran. Economic Journal, 14(7 & 8), 5-16. [In Persian]
Fotros, M. H, & Rasuli, M. (2016). The Economic Effect of Structural Change on Income Inequality in Iran During 1981-2014. Journal of Economic Development Policy, 4(1), 9-42. [In Persian]
Gharabaghian, M. (1997). Growth and Development Economics. Tehran: Publishing Ney. [In Persian]
Guillaume, M. D. M., Zytek, M. R., & Farzin, M. M. R. (2011). Iran: The Chronicles of the Subsidy Reform (No. 11-167). International Monetary Fund.
Haley, U. C., & Haley, G. T. (2013). Subsidies to Chinese indu5stry: State Capitalism, Business Strategy, and Trade Policy. Oxford University Press.
Hassanzadeh, E. (2012). Recent Developments in Iran’s Energy Subsidy Reforms. The International Institute for Sustainable Development. [In Persian]
Jahangir, M. (2014). Constitution approved by 1358 amendments and constitutional amendments adopted in 1368. Tehran: Doran. [In Persian]
Mahinizadeh, M., Feizpour, M. A, & Abedi, M. (2017). Analysis of Electricity Efficiency in Iranian Manufacturing Industries with Regard to Subsidies Reform. Journal of Iranian Energy Economics, 6(22), 165-203. [In Persian]
Mehnat far,Y, Soleimani, H & Babaee, B. (2015). The Impact of Economic Sectors’ Value Added on Economic Growth: The Case of the Iranian Provinces During 4th Development Plan (with Emphasis on Agricultural Sector) Using Panel Data. Iranian Economic Journal: Macroeconomics (IEJM), 10(20), 1-16. [In Persian]
Mehrara, M & Rezaei Bargoshadi, S (2016). The Determinants of Economic Growth in Iran Based on Bayesian Model Averaging and Weighted Averaging Least Square. Quarterly Journal of: Economic Growth and Development Research, 6(23), 89-114. [In Persian]
Moshiri, S & Altaji, A. (2008). The Effect of Structural Changes and Economic Growth in the New Industrialized Countries. Iranian Journal of Economic Research, 12(36), 85-113. [In Persian]
Moshiri, S & Altaji, A. (2015). Comparative Study of the Long-Term Trend of Structural Changes in Iran's Economy in Comparison with Newly-Industrialized Economies. Eqtesad-e Tatbiqi (Comparative Economics) biannual journal, 2(1), 149-194. [In Persian]
Moshiri, S. (2013, October). Energy Price Reform and Energy Efficiency in Iran. In IAEE Energy Forum (pp. 33-37). [In Persian]
Naji Meidani, A. A & Sotoodeh Niakarani, S. (2015). The Effect of Eliminating Energy Subsidies on Industry Cost Structure in Iran. Quarterly Journal of Economical Modeling, 8(28), 45-62. [In Persian]
Nematollahi, Z, Shahnoshi, N, Javanbakht, A, & Daneshvar Kakhki, M. (2015). Assessment of Results of the Implementation of Subsidies Targeted on Production Activities. Quarterly Journal of Economic Growth and Development Research, 5(19), 11-24. [In Persian]
Sharify, N. Zobeiri, H & Siar, S. (2016). The Stractural Changes in Iran Economy:Input –Output Analysis. M.A. Thesis, University of Mazandaran. Faculty of Economics and Administration Sciences. [In Persian]
Souri, A. (2015). Econometrics Combined with the Use of Eviews 8 and Eviews 12. Tehran: Publishing of Kurdish Studies. [In Persian]
Statistical Center of Iran (2014). Definitions and Concepts of Statistical Standard. Tehran: The Statistical Center of Iran [In Persian]
Szirmai, A. (2012). Industrialisation as Anengine of Growth in Developing Countries, 1950-2005. Structural Change and Economic Dynamics, 23(4), 406-420.
Macroeconomics Research Letter
Volume 14, Issue 28
April 2020
Pages 291-317

Files

History

  • Receive Date: 18 April 2019
  • Revise Date: 10 December 2019
  • Accept Date: 22 June 2020

Share

How to cite

Statistics