Explaining the Effect of Competitiveness and Knowledge-based Economics Indicators on the Resilience of Iran's Economy

Document Type : Research Paper

Authors

1 PhD student, Department of Economic, Kerman Branch, Islamic Azad University, Kerman, Iran

2 Department of Economic, Kerman Branch, Islamic Azad University, Kerman, Iran

3 Shahid Bahonar University of Kerman

Abstract

The resilience index refers to the ability of a system to absorb turmoil and reorganization, so that the system still maintains the task, structure, specifications, and feedback. This concept was introduced after the 2008 financial crisis in economic issues, and its goal is to assess the capability of economic compatibility of a country with shocks and ultimately the potential return to the equilibrium level. Under the conditions of the Iranian economy, due to the practices of sanctions in recent years with many challenges and evaluating the resilience level of different channels is very necessary and important. So, this study investigates the effect of competitiveness and knowledge-based economics on the resilience of the Iranian economy in the period 1985 to 2019 with Mixed Frequency annual and seasonal using the ARDL-Midas method. The results indicate that in the short-term and long-term periods, the variables of trade (Competitiveness) and innovation (Knowledge-based Economics) on resilience index have a positive and significant effect. Also, the variables of the ratio of oil revenues to GDP and foreign direct investment have had a positive and significant effect on resilience and the variables of government size and inflation rate have had a negative and significant effect on resilience. Therefore, the creation of appropriate infrastructure is recommended for using the benefits of the Knowledge base and also expanding competitiveness levels.

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