Authors
Associate Professor, Department of Political Science, Faculty of Literature and Humanities, University of Mohaghegh Ardabili, Ardabil, Iran.
Abstract
Highlights
Introduction
Cross-border investment, as an economic method, involves the transfer of financial, human, and technical resources from one country to another. As a phenomenon, this principle has received vast interest in the last couple of decades, mainly regarding the different issues it creates in economic and social areas (Khatib, 2002). It entails buying, constructing, or developing residential projects in other countries, which could serve as a means for a quality-of-life strategy, housing strategy, and economic gains in the housing sector. This investment might be targeted, in several forms, at profit generation, portfolio diversification, and even escaping economic turmoil in the home country by individuals or legal entities. Regarding this aspect, investment in the housing sector is organized as one of the most relevant mechanisms of economic and social development in many countries because such a phenomenon may cause economic growth and a job creation effect in a host country, as well as further the transfer of technologies and knowledge. However, this may have long-lasting detrimental effects on the home country, particularly in those situations where such investments are made possible by capital flight. Hence, a deeper understanding of this phenomenon and its effects on the social and economic structures of countries, particularly Iran, becomes highly significant. The core problem this research faces is to analyze the effects that cross-border investments by Iranians in the housing sectors of other countries have and will have for the development of Iran. The emergent trend in Iranian nationals investing in overseas housing markets may beg the question as to how such trends associate with influencing economic trends within the country. Furthermore, the social, cultural, and political implications of this investment need to be looked at more carefully. Therefore, such analysis has much relevance not only within the context of developing greater insight into the economic and social dynamics within Iran but also for bringing out challenges and opportunities before the policymakers and society. It is against this background that the importance of the present research consists of comprehending different dimensions of cross-border investment by Iranians in the housing sector. Under the prevailing circumstances, investment in foreign real estate has proved a lucrative option for several Iranians. This phenomenon has taken place not only because of growing domestic economic instability but also due to the search for better investment opportunities in global markets. This research will also help to raise greater awareness about its potential domestic economic implications. The second reason that makes this research necessary is the necessity for an analysis of the social and economic effects such investments have on Iranian society, affecting national macro-policies. Given the present economic and social problems Iran faces, identification of the factors affecting citizens' decisions to invest abroad will help policymakers provide more appropriate solutions to handle resources and increase living standards within the country. This research may contribute to a better understanding of cultural and social consequences related to the change in investment pattern within the society. This research is all the more urgent in view of high capital exports for housing purchases in the neighboring countries over the past years, about which no study has been conducted so far. Therefore, this study seeks to investigate motivations for cross-boundary investment in housing by Iranian citizens. This research investigates individual strategies concerning such investments and tries to trace the factors that shape the economic and social choice of Iranians. The research also tends to identify the economic, social, and cultural consequences of these investments for Iran.
Methodology
While investigating previous related research and studies on cross-border real estate investment by citizens, it was determined that no valid empirical research had been conducted on this subject in Iran. The existence of this research gap created immense problems for a better understanding of the phenomenon for both nationwide and international levels, but at the same time generated opportunities to acquaint novel approaches to the audience and develop new concepts for even more precise analyses. As a result, this paper proposed an initial framework for the qualitative method study of cross-border real estate investment by means of theoretical reviews to set up the basis for further research.
Cross-border investment is one of the critical determinants in economic growth. The determination of this phenomenon relies on several elements: economic, psychological, social, cultural, technological, and political. Therefore, these elements are macro-isolated in some theories. From an economic point of view, the determination of long-term returns and nationalist economic stability calls into question the consideration of macro factors. On the other hand, psychological theories, influencing human emotions, are considered some sort of driving stairs leading toward any kind of attitude or decision-making process. Social and cultural approaches provide an influence of institutions and international interactions that shape investors' decisions. Moreover, modern technologies and worldwide communication networks facilitate access to investment opportunities. Finally, political environment and government policy are also very significant in either attracting or deterring cross-border investments.
Results and discussion
The current study, using multi-theoretical approaches, was am attempt to investigate the phenomenon of cross-border investment in the housing sector by the citizens of Tabriz. The findings from the section on causal conditions indicated that economic insecurity, preserving asset value, government incentives, successful experiences of migrants, and political-social changes were among the main motivating macroeconomic factors in the decision-making processes of these investors. These are the psychological expectations, long-term economic returns, and strong infrastructure in the host nation—conditions that, according to theories by Keynes, Lucas, and Krugman, affect investors in seeking to take advantage of economic opportunities with reduced risks. Psychological motivation and expectations pertaining to economic stability are also important. More precisely, the social and cultural structures concerning the destination country involve the codes of laws and regulations in the host country, information access, cultural experiences, and social networks within contextual conditions. In fact, crossing over to theoretical arguments by scholars like Florida (2019) and Luhmann (1995), it has been argued that attracting investment depends significantly on social institutions and structures of creative labor and culture. It is in such attractive and varied cultural environments, combined with efficient local institutions, that attractive and diverse investment decision-making factors may lie. Indeed, these have a positive impact on owners of creative labor and foreign investors who are attracted by new opportunities and find such cultural environments a valuable context for facilitating investments. Finally, currency fluctuations and exchange rates intervene in competition with other investors, psychological factors—all underlining the role of modern technologies and institutions. In this connection, Castells (2011) and Latour (2023) argue that communication technologies and global networks also bear immaterial functions within the decision-making of investors, while Nye (2009) and Polanyi (2024) underline the fact that government policies and soft power of countries have a direct impact on attracting or deterring cross-border investments; sustainable policy and financial market regulation could be an influential driver for attracting foreign capital by government institutions. The "Strategies" section discusses, as pertinent to the participants of the study, two major strategies of acceptance and resistance within the paradigmatic model results section. In the strategy of acceptance, while investors realize the positive opportunities and successes accruing to other countries, they tend to dissociate themselves from the conditions in their home country and embark on reaping the benefits accruing from international markets. Positive experiences due to successful foreign investments and the availability of access to appropriate financial and banking facilities further serve as strong incentives for economic migration and acceptance of new cultures. In this regard, economic theories proposed by Keynes (2018) and Lucas (1990) state that such an approach is shaped with an objective to achieve long-term economic returns and enhance knowledge regarding cross-boundary investment. It is these investors who are more prone to learning and education, who also feel cultural acceptance as part of the deal because they envisage a successful coexistence with the cultures of the destination country. Thus, acceptance in this context can be reasoned to be quite rational and lucrative as a reaction towards foreign opportunities. Graver concerns about the extent of opacity in foreign markets and how globalization poses a threat to national and cultural identity define the resistance strategy. Negative experiences in the past and uncertainty regarding the stability of overseas markets deter some of these investors. Theorists like Polanyi (2024) point to the protection of cultural identity, and such groups avoid foreign investments to protect their nation's identity. Furthermore, resistance to any cultural changes and a high attachment to Iranian customs and traditions impede the acceptance of other countries' cultures. It is an approach more oriented toward the reinforcement of domestic identity and skepticism about the rapid changes brought about by globalization, whereby the role of psychological and social factors is broad.
Conclusion
The research findings in the paradigmatic model's outcomes section revealed that Iranian cross-border investment in the housing sector has reduced national investment. Such a reduction in national investment has weakened the national economy and resulted in slow economic growth. It has not only hampered the development of infrastructural facilities within the nation but also restricted employment opportunities and innovation. Meanwhile, there is increased dependence on foreign markets, making the national economy more vulnerable to international developments. As neoliberal theories point out, such dependence can impact the economic independence of the government and create an avenue for foreign powers to increase control over the country's financial resources. This phenomenon has also caused an unequal distribution of wealth in society. Cross-border investments are primarily made by a handful of the elite population that enjoys access to international investment opportunities. This situation further widens the class gap and marginalizes low-income groups even further. The change in migration patterns due to such investments has increased the pace of elite and affluent migration to other countries. Immigration of these groups has diminished social cohesion within the nation and resulted in social and economic disparities, leading to greater social unrest. The social and cultural impacts of such investments are also significant. Changes in family patterns and rising new social networks have brought about major transformations in societal values and cultural beliefs. These changes have weakened national identity due to the wide influence of interactions with foreign cultures and globalization. As theorists such as Castells (2011) argue, globalization weakens local identities and strengthens global identities. Consequently, such cultural changes have altered roles and values in society, affecting family structures and new social networks. As a result, changes have impacted not only individual and social levels but also the macro policy level, as governments are forced to adopt new policies to manage migration and economic dependence. These phenomena weaken national identity and increase social discontent, leading governments to develop new policies aimed at strengthening social cohesion and controlling the negative consequences of such dependency. In brief, cross-border investments have had profound effects not only on the country's economic structure but also on its political and social systems.
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