Commercial Surveys

Commercial Surveys

Econometric Analysis of the Determinants of Investment in the Industry, Mining, and Trade Sectors

Document Type : Original Article

Author
Mansour Asgari
Associate Professor of Economics at Institute for Trade Studies and Research (ITSR) Director of Economic Modeling Group
10.22034/bs.2026.2087442.3222
Abstract
Investment is widely recognized as a key driver of economic growth, making the identification of its determinants essential for effective policymaking. Given the strategic importance of the industry, mining, and trade sectors in Iran’s economy, this study investigates the main determinants of investment in these sectors using an econometric approach. The analysis focuses on the effects of sectoral value added, lagged oil revenues, lending interest rates, outstanding credit facilities, real money supply, and economic sanctions. The estimation results indicate that investment in the industrial sector is significantly influenced by industrial value added, lagged oil revenues, lending interest rates, outstanding credit facilities, real money supply, and sanctions. Similar results are obtained for the mining sector, where mining value added, lagged oil revenues, lending interest rates, outstanding credit facilities, real money supply, and sanctions significantly affect investment. Likewise, investment in the trade sector is determined by trade value added, lagged oil revenues, lending interest rates, outstanding credit facilities, real money supply, and sanctions. The findings also reveal that economic sanctions have adversely affected investment primarily through financial and banking restrictions, particularly by limiting the participation of foreign banks in opening letters of credit. In addition, reduced investment in the oil and gas sector has generated negative spillover effects on industry through extensive backward and forward linkages, resulting in higher financing costs, increased production costs, underutilized industrial capacity, and delays or suspension of investment projects. The findings suggest that improving access to finance, stabilizing exchange rates, strengthening investment incentives, and reducing financial constraints are essential for promoting investment in Iran’s industry, mining, and trade sectors.
Keywords
Investment
Diagnostic Analysis
Industry
Mining
Trade
Econometric Analysis
Subjects
 
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Commercial Surveys
Volume 23, Issue 135 - Serial Number 135
January and February 2026
Pages 33-54

  • Receive Date 25 April 2026
  • Revise Date 19 June 2026
  • Accept Date 07 July 2026