This paper tries to analyze effects of trade and financial liberalizations on the Iranâs government size during both long-run and short- run. Accordingly, a specification of the auto regression with distributed lag (ARDL) has been used for investigating the long run relationships between variables, and a vector correction model (VECM) has examined dynamically the short-run relationships between the government size and the explanatory variables. The time series data rely on the period 1959-2007. Â The empirical results have indicated that a rise in foreign direct investment (FDI), as a proxy for financial liberalization, and trade openness lead to a decrease in Iranâs government size, while the long-run effect of an increase in FDI is more pronounced than that of the short-run.JEL Classification: E22, F11, F13, GÂ
Falahati, A. and Sepahban Gharehbaba, A. (2023). Effects of Trade and Financial Liberalizations on the Government Size: The Case of Iran. International Economics Studies, 35(2), 61-74. doi: 10.22108/ies.2023.15518
MLA
Falahati, A. , and Sepahban Gharehbaba, A. . "Effects of Trade and Financial Liberalizations on the Government Size: The Case of Iran", International Economics Studies, 35, 2, 2023, 61-74. doi: 10.22108/ies.2023.15518
HARVARD
Falahati, A., Sepahban Gharehbaba, A. (2023). 'Effects of Trade and Financial Liberalizations on the Government Size: The Case of Iran', International Economics Studies, 35(2), pp. 61-74. doi: 10.22108/ies.2023.15518
CHICAGO
A. Falahati and A. Sepahban Gharehbaba, "Effects of Trade and Financial Liberalizations on the Government Size: The Case of Iran," International Economics Studies, 35 2 (2023): 61-74, doi: 10.22108/ies.2023.15518
VANCOUVER
Falahati, A., Sepahban Gharehbaba, A. Effects of Trade and Financial Liberalizations on the Government Size: The Case of Iran. International Economics Studies, 2023; 35(2): 61-74. doi: 10.22108/ies.2023.15518
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