Social capital and financial development studied in Iran

Number of pages: 109 File Format: word File Code: 31284
Year: 2013 University Degree: Master's degree Category: Management
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  • Summary of Social capital and financial development studied in Iran

    Thesis

    Master's degree

    Department: MBA

    Persian abstract:

    The purpose of this research is to examine the causal relationship between social capital and the financial development of Iran's economy, emphasizing the long-term relationship between them. For this purpose, an inverse index of social capital and a basic index of financial development were used, and then the coefficients of the model were estimated with the help of the vector error correction model. The results showed that social capital has a positive and significant effect on financial development in Iran's economy and there is a one-way causal relationship from social capital to financial development. Key words: social capital - financial development - vector error correction model. Institutions, norms and components such as trust are types of non-physical capital that are generally referred to as one of the main forms of capital. On the other hand, financial development includes the development of markets, tools and financial institutions as one of the indicators of economic openness and one of the most important growth tools in any economy. The main goal of this research is to investigate the causal relationship between social capital and financial development in Iran's economy, emphasizing the long-term relationship between them. In this research, we intend to measure the indicators of social capital and financial development and estimate the model with the help of an econometric model, investigate the mutual relationship between these two variables and answer the question that "is there a meaningful long-term relationship between social capital and the financial development of the Iranian economy?". 2-1) Statement of the problem and its importance. Appropriate monetary and financial services require the broad participation of the community members as well. Meanwhile, social institutions play an important role in educating and empowering people in this process, and it is believed that the social dimension and the institutional component of development play an important role in the process of economic growth and development. For this reason, identifying social capital as a factor influencing economic activities can have a significant impact on achieving the macroeconomic goals of the country. Social capital is one of the most important types of non-physical capital, which has received much attention from researchers in the fields of humanities and social sciences in the decades after 1980. In our country, in recent years, special attention has been paid to social capital and its role in the economy. As an example, Suri [1], Elami et al. [2], Renani et al. [3], Rahmani et al. [4], Safdari et al. [5] and All of them have investigated the role of social capital in Iran's economy in their studies and have shown that there is a positive relationship between social capital and its economic consequences. In many of the mentioned Persian studies, the goal of the researchers is focused on the direct effects of social capital on economic growth and development. For this purpose, in the upcoming research, the indirect effect of social capital on the economy through its effect on financial development is considered as a general goal.

    On the other hand, financial development is considered as one of the indicators of the degree of openness of trade and economy, and it is a determining factor in explaining the reasons for the difference in economic growth rates in different societies. Various internal studies such as Nazifi [6], Hibti and Mohammadzadeh [7], Samadi et al. In explaining the position of financial development in Iran's economy, the results of these studies indicate the existence of a significant relationship between financial development and its positive economic consequences. However, due to major obstacles such as government ownership in the economy, the lack of independence of the central bank, the lack of adoption of appropriate monetary policies by the central bank, or the lack of improvement in management methods, in the report of the World Economic Forum in 2008, the name of Iran does not appear among the 52 leading countries in the field of financial development [12] and in terms of financial development indicators in the years after the 1980s, this country is below the average level of MENA countries (major oil producing countries in the Middle East and North Africa region). [58]. This indicates that until now, proper attention has not been paid to the investigation of factors affecting the development of the financial system in the country and the need to conduct more studies in this regard.This indicates that due attention has not been paid to the factors affecting the development of the financial system in the country and the need to conduct more studies in this regard is still felt.

    Researchers consider one of the most important levels affecting financial development to be the level of stability of social phenomena, which goes back to informal institutions such as cultures, religion and others. Investigating the impact of this level of social phenomena on financial development, considering their effects on financial decisions, seems necessary and necessary. Unfortunately, the lack of necessary information to calculate the indicators of this level limits the empirical investigation, but the calculation of some indicators at this level seems necessary [13].

    Generally, trust is mentioned as the most important component of social capital. Receiving or granting formal and informal loans, personal checks, various derivative instruments and asset portfolio allocation activities are all among the tools of financial activities, and the use of each of these tools requires a certain level of trust between the parties to the transaction. This issue highlights the role of social capital in the development of financial systems.

    Examining the relationship between social capital and financial development in practical terms can also have positive effects in providing the necessary grounds for the development and expansion of the financial system, followed by macroeconomic growth. In view of the mentioned requirements and also the innovation that has been made in investigating the impact of financial development on social capital in Iran, it seems necessary to conduct the upcoming research. 3-1) Research objectives 1-3-1) General goal The general goal of this research is to investigate the causal relationship between social capital and financial development in Iran's economy, emphasizing the long-term relationship between them.

    2-3-1) Specific objectives

    1-2-3-1) Investigating the impact of public trust as an index of social capital on the index of financial development

    2-2-3-1) Investigating the impact of financial development on the level of public trust as an index of social capital

     

    4-1) Assumptions and research questions

    1-4-1) Research hypotheses

    1-1-4-1) Social capital has a significant effect on the financial development of the Iranian economy.

    2-1-4-1) The financial development of the Iranian economy has a significant effect on social capital.

    2-4-1) Research questions

    1-2-4-1) Does social capital have an effect Does it have any significance on the financial development of Iran's economy? 2-2-4-1) Does the financial development of Iran's economy have a significant effect on social capital? 5-1) Research scope 1-5-1) Thematic scope Investigating the causal relationship between social capital and financial development in Iran's economy, emphasizing the long-term relationship between them.

    2-5-1) Time domain

     

    The period between 1363 and 1390

    3-5-1) Spatial domain

     

    The country of Iran (national level)

    6-1) Research vocabulary

    Social capital: Social capital is the set of norms in social systems that increase the level of cooperation of community members and lower the level of exchange and communication costs [59].

    Trust: Trust means believing in an action that is expected from others. The concept of trust may be expressed to predict the behavior of a partner according to his obligations and requirements and the possibility of predicting his behavior in negotiations and interactions while he may also be faced with opportunistic behavior [14]. Financial development: Financial development is often defined as an improvement in the quantity, quality and efficiency of the services of financial intermediaries [60]. Research

    1-2) Theoretical foundations

    1-1-2) Social capital

    1-1-1-2) Introduction

    In political science, psychology and anthropology, social capital means norms, networks and organizations to reach limited resources and power and channel for making decisions and policies. Scientists of these sciences also reach the concept of social capital through the analysis of norms, networks and institutions. Meanwhile, economists examine this concept through institutional analysis and contracts and mutual relationships between individuals and its effects on exchanges and investments.

  • Contents & References of Social capital and financial development studied in Iran

    List:

    Chapter One - Introduction and generalities of the research.1

    1-1) Introduction..2

    2-1) Statement of the problem and its importance.2

    3-1) Research objectives.4

    1-3-1) General objective.4

    2-3-1) Specific objectives.4

    1-4) Assumptions and questions Research. 4

    1-4-1) Research hypotheses. 4

    2-4-1) Research questions. 4

    5-1) Research scope. 5

    1-5-1) Thematic scope. 5

    2-5-1) Time scope. 5

    3-5-1) Spatial scope. 5

    6-1) Research vocabulary. 5

    Chapter Two - Literature and research background.6

    1-2) Theoretical foundations..7

    1-1-2) Social capital.7

    1-1-1-2) Introduction..7

    2-1-1-2) Forms of capital.9

    3-1-1-2) Definition of social capital.9

    4-1-1-2) Levels of capital 11

    5-1-1-2) theories of social capital. 13

    6-1-1-2) types of social capital. 13

    7-1-1-2) importance of social capital. 14

    8-1-1-2) dimensions and components of social capital. 15

    9-1-1-2) social capital and economic consequences. 16

    10-1-1-2) Measurement of social capital. 17

    2-1-2) Financial development. 20

    1-2-1-2) Introduction. 20

    2-2-1-2) Definition of financial development. 22

    3-2-1-2) Importance and functions of financial development. 24

    4-2-1-2) Factors affecting development. 29

    5-2-1-2) Iran's financial system. 31

    6-2-1-2) Financial development and economic consequences. 33

    7-2-1-2) Social capital and financial development. 35

    8-2-1-2) Measuring financial development. 40

    2-2) Empirical evidence. 46

    1-2-2) Social capital and economic consequences. 46

    2-2-2) Financial development and economic consequences. 48

    2-3-2) Social capital and financial development. 50

    Chapter three - research method. 54

    1-3) Introduction..55

    2-3) Research assumptions. 55

    3-3) Type of research. Statistics. 55

    3-5) Scope of research. 55

    3-6) Information collection method. 56

    3-7) Research tools. 56

    3-8) Research tests. 56

    3-1-8) Phillips-Peron unit root test.

    3-8-3) vector error correction model.59

    3-9) research variables.60

    3-1-9) social capital index.61

    3-2-9) financial development index.61

    3-9-3) exogenous variables.62

    3-10) proposed model.62

    Chapter four - calculations and Research findings.65

    1-4) Introduction..66

    4-2) Phillips-Peron unit root test results.66

    4-3) Johansen cointegration test results.68

    4-4) Model coefficient estimation results using the vector error correction model.70

    Chapter five - conclusions and suggestions.72

    1-5) Research summary.73

    2-5) Conclusion.74

    3-5) Suggestions for future research.76

    4-5) Research limitations.77

    Appendix..78

    Sources and references..88

    English abstract.104

    Source:

     

    ]1 [Suri / Social Capital and Economic Performance / Economic Research / No. 69 / 1384 / 108-87

     

    ]2 [ Elami et al. / Social Capital and How It Affects the Economy / Journal of Economic Research / No. 71 / 1384 / 296-239

    [3] Renani et al. / Social capital and economic growth: presenting a theoretical model / Isfahan University Research Journal / Volume 21, Number 2 / 1385 / 151-133

    ]4[ Rahmani et al. / Investigating the impact of social capital on the economic growth of Iran, a case study: the provinces of the country using the spatial econometric method / Economic Research Quarterly / Year 6, Number 2 / 1386 / 1-30

     

    ]5 [Safdari et al. / Investigating the impact of social capital on Iran's economic growth / Quarterly Ekhtaz Qathei (former economic reviews) / Volume 5, Number 2 / 1387 / 39-61

    ]6[ Nazaifi / Financial development and economic growth in Iran / Economic Research Journal / Number 14 / 1381 / 130-97

    ]7 [Hibti and Mohammadzadeh / Evaluation of the effects of financial system development on capital formation and economic growth / Economic Research Journal / Number 15 / 1383 / 197-238

    ] [8] Samadi et al / Examining the relationship between the development of financial markets and economic growth / Economic Research Quarterly / Volume 7, Number 3 / 1386 / 16-1

    ]9[ Rasakhi and Ranjbar / The effect of financial development on the economic growth of member countries.

Social capital and financial development studied in Iran