Investigating the Effects of Financial Repression on Private Investment in Agriculture Sector

One of the present phenomena that virtually explain weaknessesin financial systems of different countries is financialrepression. financial repression encompasses the different interferencesof governments in financial markets through determiningthe ceiling interest on bank deposits, high rates of legal reserves,and the government’s interference in distribution of bankcredits,which prevents the efficient performance of financialmarket for better allocating resources and funds. on the otherhand, investment in agricultural sector enjoys a significant importancedue to the growth of production and employment in thissector and rooting for the same notions in other economic sectors.regarding the fact that the subject matter of the current paper isof utmost importance, it tries to investigate the impacts offinancial repression on investments in agricultural sector. inorder to realize this objective, measures such as the size of thegovernment in economy, the measure for financial intermediationof banks, and the ratio of savings to gdp (gross domesticproduct) were utilized as the factors for financial repression. theregression results of ardl showed that the effects from themeasures of government size in economy and financial intermediationof banks had a negative and significant impact on privateinvestment in agricultural sector. this means that the bigger thesize of government in economy the less the willingness of theprivate sector for investing in agriculture. moreover, regardingthe fact that the majority of banks in iran are governmental, themeasure for financial intermediation of banks had a negative andsignificant impact on private investment of agricultural sector.