Considering the Effects of Doing Business on Economic Growth for Iran, MENA and OECD Countries by GMM Method

Mehrabani, Fatemeh; Abdollahi, Fereshteh; Basirat, Mehdi

Considering the Effects of Doing Business on Economic Growth for Iran, MENA and OECD Countries by GMM Method

Document Type : Review Article

Authors

¹ Assistant Professor Department of Management and Economics, Ahwaz Branch, Islamic Azad University Ahwaz, Iran

² M.Sc. in Economics, Islamic Azad university, Ahvaz Branch

³ Assistant Professor of Economics, Islamic Azad university, Ahvaz Branch

Abstract

Regulatory barriers to doing economic activities lead to reducing entrepreneurship and entrepreneurial activities, investment, job creation, and ultimately economic growth will decrease. Thus, deregulation and structural adjustment in the laws and regulations in terms of improving the business environment is one of the main priorities to achieve economic growth and development. According to above, main purpose of this paper is investigating the effect of doing business (DB) indicators on economic growth by using panel data method and GMM estimator, for Iran, OECD and MENA countries during 2006-2012.The main findings of our investigation are: First, Iran economic growth has decreased in recent years. Second, studying and comparing Iran DB indicators with MENA and OECD countries show that they are low and Iran's ranking is undesirable. Third, the results show a robust support for the claim that the improvement in DB indicators will lead to an increase in the economic growth. About MENA countries, dissolution index (RI=0.18) has the greast effect on economic growth and least effect is related to cross-border index (0.027). However, for OECD countries the greatest and least effects are belong to starting business index (SB=0.35) and tax payment (PT=0.12). While the PT index has negative effect (-0.23) on MENA countries economic growth. Because worsening business environment leads to decreasing economic growth.

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