The Analysis of FDI of Limited Connectivity country in a Complex Network: A Case Study of Iran

Articles in Press

Document Type : Research Paper

Authors

Department of Economics, Faculty of Economics, Management, and Social Sciences, Shiraz University, Shiraz, Iran.

10.22059/ier.2024.369266.1007878

Abstract

Foreign direct investment (FDI) is widely regarded as a vital means of securing financial resources and promoting national development. For Iran, a nation with limited connectivity within the global FDI network, attracting foreign capital is essential for sustainable growth. This paper employs complex network analysis to examine the FDI landscape in Iran, contributing to the academic discourse on this subject. We analyze the FDI network comprising 248 countries from 2009 to 2021, extracting and evaluating various network indices. The findings reveal several key insights into Iran’s positioning within this framework: Degree centrality demonstrates slight fluctuations but consistently resists significant improvement; closeness centrality remains stable, counter to broader trends of globalization; however, PageRank indicates a troubling downward trend. Acknowledging the critical role that communication plays in enhancing FDI, we investigate the significance of connectivity, network dependence, and centrality through visual representations and graph analysis. Our research recommends that improving FDI in Iran's network relies on enhancing centrality within network indices and establishing links with countries that possess high PageRank scores. This strategic approach is essential for bolstering FDI inflows from influential nations, thereby supporting Iran's development objectives.

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Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 02 November 2024

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