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Effects of Government Investment in Energy Sector on Growth, Employment and Private Investment in Iran

Author

Listed:
  • Abbas Assari Arani

    (Faculty Member, Department of Economic Development and Planning, Tarbiat Modares University, Iran)

  • Raziyeh Mohammadi Saber

    (MA in Energy Economics, Department of Economic Development and Planning, Tarbiat Modares University, Iran,)

  • Lotfali Agheli

    (Faculty Member, Economic Research Institute, Tarbiat Modares University, Iran)

Abstract

This research analyzes governmental investment effects in energy sector including subsectors of oil, gas and electricity on growth, private investment and employment in agriculture, industry and mining, and services during 1971-2013. We use vector autoregressive models in order to derive the response of variables, impulse response function and variance decomposition. The results indicate that governmental investment influence growth in agriculture, industries and mining, and services negatively but in median-term, it influences agriculture, and industries and mining positively. Effect of government investment is positive for private investment. In industries and mining sector, the relationship is positive in long term and negative in middle term.

Suggested Citation

  • Abbas Assari Arani & Raziyeh Mohammadi Saber & Lotfali Agheli, 2017. "Effects of Government Investment in Energy Sector on Growth, Employment and Private Investment in Iran," International Journal of Energy Economics and Policy, Econjournals, vol. 7(6), pages 103-111.
    • Handle: RePEc:eco:journ2:2017-06-13
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    References listed on IDEAS

    as
    1. António Afonso & Miguel St. Aubyn, 2009. "Macroeconomic Rates Of Return Of Public And Private Investment: Crowding‐In And Crowding‐Out Effects," Manchester School, University of Manchester, vol. 77(s1), pages 21-39, September.
    2. Abiad (ADB), Abdul & Furceri (IMF and University of Palermo), Davide & Topalova (IMF), Petia, 2016. "The macroeconomic effects of public investment: Evidence from advanced economies," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 224-240.
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    Cited by:

    1. Nidya Listiyono & Adi Wijaya & Irsan Tricahyadinata, 2021. "The effect of investment, education level, and government spending on economic growth and labor absorption in East Kalimantan Province, Indonesia," Technium Social Sciences Journal, Technium Science, vol. 20(1), pages 465-485, June.

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    More about this item

    Keywords

    Energy Sector; Government Investment; Economic Growth; Employment; Private Investment; Vector Autoregressive Method;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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