Shirin Hashemzadeh-Soureh - Aston Business School, UK

This paper sets priorities regarding Iran’s petrochemical industries’ competitiveness emphasising Porter‘s theory. It provides an insight into the socio-economic aspects of growth in different fields of the country’s framework. The changing constraints on Iranian productivity and prosperity over a time are assessed in order to provide more informed policy debate on how to manage the transition to different stages of competitiveness. Iran’s most significant weaknesses according to the GCR are in physical infrastructure, human capital (HC), also in not having access to efficient technology. Indeed, the main driver of growth related to some cross-country research is capital formation, whereas others argue that it is total factor productivity (TFP). Foreign direct investment (FDI) is expected to facilitate HC upgrading and technology transfer to improve productivity, partly resulting into human happiness and welfare. The central motivation for this study is the economic growth drivers in contemporary Iran. The reason behind focussing on petrochemical industry is that the allocation of oil resources to promote growth has traditionally been the cornerstone of development plans in Iran. In addition, political structure shapes economic policies and in turn economic outcomes affect the capability of political economy actors. The types of resources gain attention only at the time that they play a crucial role in political studies (Pesaran ٢٠٠٧). Iranian petrochemical ability to reach its objectives depends on the country’s capabilities for improving its TFP by upgrading HC, which could be a consequence of technology transfer (Narula and Marin ٢٠٠٣), not forgetting the effects of FDI on the level of HC, domestic investment, infrastructure, macroeconomic stability, institutions, and trade policies (Lipsey ٢٠٠٢); with repercussions on private businesses, trade associations, professional organisations, universities, research institutions, and the many concerns that have various impacts on the business environment.