Economic Change and Restructuring

, Volume 52, Issue 3, pp 255–277 | Cite as

Stock market behavior of pharmaceutical industry in Iran and macroeconomic factors

  • Hassan Heidari
  • Arash Refah Kahriz
  • Yousef MohammadzadehEmail author


This paper is the first attempt to evaluate the behavior of Iran’s pharmaceutical industry in light of challenges and variations. The pharmaceutical industry can be examined from two dimensions, namely, supply and demand. With respect to the demand side, the aging population, growing urbanization, and people’s changing preferences have been identified as the major issues shaping this demand in Iran in recent years. Regarding the supply as the main focus of this paper, we examine the effect of the most important macroeconomic variables such as inflation rate of health care, oil price shocks and money growth in the pharmaceutical industry. We investigate the influencing factors through impulse response analysis and variance decomposition analysis by collecting monthly data from 2005:1 to 2016:3. The results of this study demonstrate that pharmaceutical price has increased recently, and widespread changes have occurred in the Iranian’s pharmaceutical industry. Moreover, our findings indicate that the money growth and inflation rate of health care are the most influential factors in the pharmaceutical industry in Iran, during the period of study.


Health care Macroeconomic factors Pharmaceutical industry Vector autoregressive model 

JEL Classification

G40 I11 I12 L11 L16 



The authors would like to thank the editor and anonymous referees for their comments and suggestions have significantly improved the earlier version of this research. All remaining errors and omissions are our own responsibility.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Hassan Heidari
    • 1
  • Arash Refah Kahriz
    • 1
  • Yousef Mohammadzadeh
    • 1
    Email author
  1. 1.Department of EconomicsUrmia UniversityUrmiaIran

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