Foreign Direct Investment Supply Function Simulation in Iran, by using Ant Colony Optimization (ACO) Algorithm

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Abstract

Government policies had been provided Foreign Direct Investment (FDI) multiplier entry basis in Iran in two late decade with effect on FDI absorbency effective ingredient. In this study, in order to set government policies effects outlook on the future situation of FDI supply in Iran in two late decade, two forms of non-linear FDI supply functions has been simulated, by using direction line of effective macro economic indices on FDI supply. In other words, efficiency of the FDI supply estimation of Iran with use of Ant Colony Optimization (ACO) algorithm has been improved. ACO-based FDI supply Simulation (ACOFDISS) model has been developed, by using market scale indicator, human capital indicator, natural resources access indicator and in frastructure indicator variables. In this article one of the suggestive equations is exponential and the second one is quadratic. In FDI supply function, the quadratic form provides better results in Simulation and description FDI supply process in Iran and it can be used in FDI supply prediction with upper prediction standards.
JEL Classification: F21 ,C15 ,C53 ,C61

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