The Role of Infrastructure in Promoting Economic Growth in Iran

Lack of infrastructure continues to be a key obstacle to growth and development in most of low-income countries. In recent years, however, the role of infrastructure has received increased attention. The goal of this paper is to provide an empirical evaluation of the role of infrastructure on economic growth of Iran over the period of 1985 to 2008. To do this, we have employed the autoregressive distributed lag (ARDL) framework and introduced Infrastructure capital as an input into aggregate production, because it comes at the cost of reduced investment in other types of capital. Our findings indicate that transportation facilities distinctively length of railway and roadway, also telecommunication infrastructure (fixed phone line) have positive and significant impact on economic growth of Iran but electricity production capacity doesn t have significant impact on per capita output growth.