Please Wait! Your file will start to download within 10 seconds automatically. Otherwise click here Download

AN investigation on the Relationships between Economic Freedom and Economic Security with Capital Formation Evidences from New-Emerging and Developing Countries.


Karim Rasuli, Ph.D , Asadollah Farzinvash ,

Download Full PDF Pages: 14-33 | Views: 449 | Downloads: 125 | DOI: 10.5281/zenodo.3441724

Volume 2 - November 2013 (11)


If the security of investment in developing countries and transitional economies is guaranteed and the necessary legal process is provided, the international investors will be more interested in participating more actively in such economies. Economic security can be known as a kind of public commodity or service that the private sector cannot produce it. This failure of the market opens the stage for the public sector activity in order to respond positively and effectively in this regard. To establish economic security and to perform the given duties by the government, according to which its economic activities will hopefully reach a minimum level, requires an income source for the government. The main purpose of the present research is to explain and clarify the relationship which exists between the foregoing issues. For this reason, data of 14 countries, as classified and ranked between two groups of newemerging countries in the global economy and developing countries, have been examined in the form of an integrated data model. The findings of this research show that for both groups of new-emerging countries and the developing countries, besides the original quantitative variables such as economic growth and interest rate, which can affect capital formation in the economy, there are certain qualitative variables that can play a significant role on it. Moreover, the objective observations show that there are certain differences regarding the kind of effects caused by the foregoing variables in the process of capital formation in the two types of new-emerging and developing countries in this research. In the new-emerging countries, besides economic growth and interest rate, economic security and stability along with economic have significant and positive effects on capital formation. While in developing countries, the effect of the qualitative variable of economic security is more significant and important than economic freedom, which means that the presence and provision of economic security have a greater and more important impact on capital formation relative to economic freedom variable. 


Investment, Economic Security, Economic Freedom, Integrated Data Model 


A- Persian References:

         i.            Persian References: [1] "Economic security and overview of obstacles to investment in Iran" (1995), The Researches Center of Islamic Republic of Iran Consultative Assembly.

       ii.            "Essays of the Conference on Solutions of Development of Economic Security " (2003).Tehran.Institute of Trade Studies and Research and Vice Chancellor for Research and Training of the Judiciary.

      iii.            Azar, Edwardi and Chung-in. “National Security in the Third World”, Tehran, Publications of the Center for Strategic Studies.

     iv.            Branson, William (2001). Macroeconomics Theory and Policies, translated by Abbas Shakeri, 20th Edition, Ney Publications, Tehran.

       v.            Buzan, Barry. (1999). "People, Governments, and Fear", Publications of Strategic Studies Center.

     vi.            Pourseyed, Behzad. (2003). “Economic Security from the Viewpoint of Foreign Investment" , Essays of the Conference on Solutions of Development of Economic Security.

    vii.            Tafazzoli, Fereidoun. (2012). Macroeconomics : Economic Theories and Policies.3rd. Edit, 19th Edition. Ney Publications, Tehran.

  viii.            Tafazoli, Fereidoun. (2012). History of Economic Views. 3rd. Edit, 10th Edition. Ney Publications, Tehran.

     ix.            Tamadon, Mohamad Hosain; Darakhshan, Mahmud (2003). “A Few Points about Economic Security and ways of Providing it”, Essays of the Conference on Solutions of Development of Economic Security.

       x.            Jafari Samimi, Ahmad (1991), "Public Sector Economics", Tehran SAMT Publications.

     xi.            Jahanbozorgi, Ahmad (2009), Role of the Economic Security in Protection of the Islamic Revolution. Journal of Iran Islamic Revolution Studies, No.16.

    xii.            Chini, Habib (2003), “Possibilities, Limitations, Opportunities and Threats Against Economic Security", Essays of the Conference on Solutions of Development of Economic Security .

  xiii.            Hassan. Heydari; Parvin, Soheila; Shakeri, Abbas., Feizi Yengjeh, Soleiman, (2000), “The effect of uncertainty of economic growth on economic growth in Iran: Observations based on GARC Modele, Tehran, Economic Research of Iran, Summer 13 (43). Ps:189- 210.

  xiv.            Khorsndian, Ali (2005), Studying factors affecting the balance of payments from monetary point of view: A case study of the relationship between economic security and balance of payments. Journal of Economic Research and Policies. No.(34).

   xv.            Dadgar, Yadu'llah (1989), “Public Finance and the Economic of the Government”,

  xvi.            Rahmani, Taymour (2010), New macroeconomic. 1st Volume. Tehran, Bradaran Publications.

xvii.            Hossein, Abbasi-Nejad, Maysam. Amiri (2007). " Studying the effect of social capital on economic growth of Iran: A case study on provinces of the country with spatial econometric method, Tehran", Economic Research , 2, 2, 1-30, 1386”.

xviii.            Falahi, Saman; Rezaee, Mohamad Ghasem; Sabzerou, Mahboubeh (2009)" , General acceptance of corruption of tax and democracy: A study of cross- country". Journal of Tax Research Center, Tehran. State Tax Organization 19,11, 37,62.

  xix.            (2001), "The economic role of insurance sector in linking between transfer of risk to the capital market. Insurance Industry Quarterly Journal, 2, 35.

   xx.            Ranjbar, Mohsen; (2000), Importance of paying attention to economic security in economic policy making of the country. Monthly Economic-Political Information Journal. No. 274.

  xxi.            Sezavar, Mohamad; (2003), Reasons for decrease of economic security in Iran. Master's thesis, Faculty of Economics, Tehran University.

xxii.            Shakeri, Abbas; Salimi Fereidoun; (2006), Factors affecting on attracting investment in Chabahar Free Zone and prioritizing them with using AHP mathematical technique, Tehran, Economic Research Journal, 6 (1 continuous 20), pages 95-130.

xxiii.            Shakeri, Abbas; (2008) , Macroeconomics Theory and Policies, Tehran, Parsnevisa Publications.

xxiv.            Chalchyan, Aboutaleb; (2006), Capital formation and its economic barriers in Iran (1975-2004) Ph.D. thesis, Adviser: Dr. Kamjani, Tehran, (Islamic Azad University, Science and Researches Branch.

xxv.            Sharif Azade, MohamadReza; Hosseinzadeh Bahraini, Mohammad Hossein, (2003), Private investment affected by Economic Security Indexes (1979-2000) in Iran. Tehran, Mofid Journal. No.38.

xxvi.            Abduli, Gilda; (2002), " Economic security and its effect on attracting the financial resources (with emphasis on the industry sector ). University of Tehran, Economic Development and Researches Institute.

xxvii.            Ghasemian, Solayman; (2003), "A look at the concept of economic security and its role in economic development", Essays on Conference of Solutions for Development of Economic Security

xxviii.            Constitution of the Islamic Republic of Iran.

xxix.            Katouzian, Mohammad Ali, (2004),” Adam Smith and Wealth of Nations”. 2nd edition, Amirkabir Publications.

xxx.            Gorgi, Ebrahim; Hashemian, Masoud; (2007). Comparative analysis of the components of economic security in Iran. Quarterly of Strategic Defensive Studies.

xxxi.            Gilanipour, Javad; (2002), Studying solutions for attracting foreign direct investment with emphasis on role of Customs in Iran , Master's thesis, University of Tehran. Faculty of Economics.

xxxii.            Lypzygr, Danny, (----- ), "Development experience in East Asia”, translated by Gholamali Farjadi, Research and Planning Higher Institute.

xxxiii.            Mandel, Robert; (1998), National Security Visage, Publications of the Center for Strategic Studies.

xxxiv.            Tadbir Eghtesad Research Institute, (2007), " Country Risk and Credit ", from the studies on ranking the economic of Iran.

xxxv.            Mir-Mohammad Sadeghi, Hossein; (2007). “Duty of the Judiciary in settlement of commercial claims as pre-requisite to economic security ”.

xxxvi.            Hashemian Esfahani, Masoud; Gorji, Ebrahim. (2007). Application of economic security Index in geo-economic developments, Tehran. Journal of geo-politics of Iran, No.7.

xxxvii.            Yousefian, Ali; Gholami, Saeed; (2003) "Economic security and unlimited bureaucracy". Essay of the Conference on Solutions of Development of Economic Security.

B- English References:

         i.            Abdou, A; Moshiri, S. (2009), Privatization and capital formation in developing countries: An empirical analysis, International Review of Applied Economics, 23(5),pp.557-575.

       ii.            Azman-Sainia. W.N.W. Zubaidi Baharumshah, Ahmad (2012), "Foreign direct investment, economid freedom and economic growth: International evidence, Journal of Economic Modeling, Volume 27, Issue 2.

      iii.            Brunetti, Aymo; Kisunko, George & Weder, Beatrice (1997), " Credibility of rules and economic growth: Evidence from worldwide survey of the private sector "World Bank policy research working paper, No. 1760, Washington.

     iv.            Crowder, W.J.; de jong,P.J. (2011), Does investment lead to greater output? A panel errorcorrection model analysis, Applied Economics, 43 (7),pp.773-785.

       v.            DeRouen Jr. Kark; Biglaise,Glen (2005)," Security, property rights and US foreign direct investment ", political economy of MNE Conference at Washington University.

     vi.            Doucouliagos, Chris; Ulubasoglu, and Mehmet, Ali, (2011), "Economic freedom and economic growth: Does specification make a difference? ", European Journal of Political Economy, Vol.22, Issue 1m March 2006,pp.60-81.

    vii.            Drine, I.; Rault,C. (2003), Do panel data permit the rescue of Balassa-Samuelson hypothesis for Latin American countries? Applied Economics, 35 (3),351-359.

  viii.            EIU, Reports on economic freedom, London: Economist Intelligence Unit,various years.

     ix.            Fabricius, Michael (1998), " The impact of economic security on bank deposits and investment", IMF, WP/98.

       x.            Greene, J.;Villanueva, D. (1991), Private investment in developing countries: an empirical analysis, Staff Papers-International Monetary Fund, pp.33-58.

     xi.            Gwartney, James; Lawson, Robert (2009), "Economic Freedom of the World, Annual Report, available at : http://

    xii.            Herzer, D.; Grimm,M. (2012), Does foreign aid increase private investment? Evidence from panel cointegration. Applied Economics, 44 (20).

  xiii.            Herzer, D.; Morrissey,O. (2009), The long run effect of aid on domestic output. University of Nottingham. Center for research in economic development and international trade ( CREDIT).

  xiv.            Knack, Stephen; Keefer,Philip (1995) , Institutions and economic performance: Cross-country testing using alternative measures", Economics and Politics, Vol.7,pp.207-227.

   xv.            Kubatova,Kveta; Rihova, Lucie (2009), "Factors affecting revenues from corporate tax", available at:,%20Lucie,%20Rihovaubatov a.pdf

  xvi.            Mesasw,C (2004), " Economic Security",Cracow,Poland.

xvii.            Omer,C.Thomas; K. Marjorie,Shelly (2003),"Competitive, political, and economic factors influencing state tax policy changes" , available at:

xviii.            Poirson, Helene (1998)," Economic security, private investment and growth in developing countries" , IMF,WP/98/4.

  xix.            Sameti, Morteza Shahchera, Mahshid (2006), " Economic freedom, economic growth and government tax revenue in (MENA)" , Iranian Economic Review, Vol.10,No.

   xx.            Smith, Adam (1937,1776) The Wealth of Nationas, New York: Random House.

  xxi.            World Bank (2013), World Development Indicators.

Cite this Article: