An Analytical and Explanatory Framework for Establishing Offshore Banks in the Free Trade-Industrial Zones of Iran

Objective A review of Iran’s economic conditions, particularly the financial system in recent decades, reveals its limited participation in international banking. The lack of access to financial markets for investment and trade, limited services offered by domestic banks, their inability to compete in global financial markets, and economic sanctions have created significant challenges in engaging with the international economy. The establishment of offshore banks in Iran’s free trade-industrial zones could serve as an initial step and a connecting link to align with the global economy and enter international financial markets effectively. These banks, by offering a wider range of services, could facilitate capital flow, encourage foreign investment, and enhance the competitiveness of Iranian financial institutions significantly. In addition, such banks could contribute to the development of international trade and help alleviate the existing economic pressures faced by local businesses and individuals. Designing and creating an operational model for utilizing any tool in the field of economics and management is essential for achieving sustainable growth. This study aims to provide an analytical and explanatory framework for establishing such a bank in these free zones. Methods This study employed a mixed-methods exploratory sequential design, commencing with qualitative data analysis. In the qualitative phase, grounded theory methodology was utilized, incorporating open, axial, and selective coding procedures. Participants were purposefully selected and recruited via snowball sampling from a population comprising finance experts affiliated with leading universities, bank managers operating in free trade-industrial zones, and commercial entrepreneurs and company owners active within these zones. A total of eleven semi-structured interviews were conducted until theoretical saturation was reached. In the quantitative phase, a descriptive-survey method was applied to analyze and explain the proposed framework. In this stage, 90 participants were randomly selected. Data were collected through a 30-item questionnaire derived from the grounded theory approach, and data analysis was performed using SMART PLS software. Results In the qualitative phase of the research, after three stages of open, axial, and selective coding, a model comprising six main categories (central phenomenon, causal conditions, intervening conditions, contextual conditions, strategies, and consequences of establishing the offshore bank), 30 subcategories, and 153 concepts were presented. In the quantitative phase, the validity of the research model was assessed through structural equation modeling indicators, which demonstrated acceptable fit for all the obtained indices. Conclusion According to the research findings, an appropriate explanatory framework for the establishment of offshore banks in the free trade-industrial zones of the Islamic Republic of Iran was presented. One of the key outcomes of the proposed framework is the integration of the country's financial institutions with international financial markets, which can serve as a catalyst for economic growth and development through the establishment and operation of offshore banking institutions.