Mohammad Rezaei

Background: Today, the growth of total factor productivity, particularly the increase in the share of labor and capital productivity, can significantly contribute to the economic growth of countries. The Seventh Development Plan of the Islamic Republic of Iran targets an 8% economic growth rate over a five-year period, emphasizing the productivity of production factors, including labor, capital, production technology, and managerial roles, with 2.8% of this 8% growth attributed to productivity. In this research, the Cobb-Douglas production function is estimated using the FMOLS method to assess total factor productivity in selected petrochemical companies in Iran, based on an extended Solow residual model. Subsequently, the DOLS method is employed to analyze the impact of exchange rate fluctuations on total factor productivity in selected petrochemical companies from 2017 to 2023. The results indicate a negative relationship between physical capital and exchange rate fluctuations, while positive relationships exist between value added, labor, energy costs, and raw material costs with total factor productivity. Objective: This study examines the impact of exchange rate fluctuations on total factor productivity, including labor, capital, energy, and direct production materials in selected petrochemical companies. The findings of this research will be effective for optimal policymaking in the developmental programs of the petrochemical industry. Methodology: This research is descriptive and applied, utilizing econometric models of cointegration and employing EViews econometric software to extract the effects of exchange rate fluctuations in the Iranian economy. It estimates the relationship between explanatory variables (exchange rate fluctuations, capital, labor, energy costs, direct material costs, and value added) and the dependent variable (total factor productivity in the petrochemical industry). This study focuses on the impact of exchange rate fluctuations on tot