2016 doi 10.17072/1994-9960-2016-4-66-73 UDC 336:338.45(470+571)+55) LBK 65.26+65.30(2Рос+5Ирн) THE IMPACT OF FINANCIAL MARKET ON INDUSTRY GROWTH: AN EVIDENCE FROM RUSSIA AND IRAN I.G. Sergeeva, Doctor of Economic Sciences, Professor, Head of the Department of Financial Management and Audit E-mail: Igsergeeva@gmail.com Saint-Petersburg National Research University of Information Technologies, Mechanics and Optics, 9, Lomonosova st., Saint-Petersburg, 191002, Russian Federation T. Tayebehsadat, Postgraduate student E-mail: Tstaba64@gmail.com Saint-Petersburg National Research University of Information Technologies, Mechanics and Optics, 9, Lomonosova st., Saint-Petersburg, 191002, Russian Federation The relationship between financial markets and industry growth has been approved by many previous studies. <...> In this paper, as an innovative research, we try to find the impact of market capitalization in financial market as a proxy for financial market on the industry growth in Russia and Iran. <...> Hence, it would be interesting to compare market capitalization-industry growth nexus in Russia and Iran as two developing countries. <...> In order to fulfill this purpose, an econometric model called Vector Autoregressive Model (VAR) is applied for the annual data over the period of 1992–2014. <...> The finding proves the positive relationship between market capitalization and industry growth in both countries, Iran and Russia. <...> Based on the results, a 1% increase in market capitalization in Iran and Russia increases the industry growth by 0.07% and 0.02%, respectively. <...> It has been concluded that market capitalization can play a significant role in order to grow the industry in Iran and Russia. <...> However, these two countries need to improve the efficiency of their financial markets to improve the positive impact of these markets on their industrial growth. <...> The novelty of this research can be highlighted in this way that the financial market in oil exporting countries, Russia and Iran as our case studies, may be a golden key to reach to a positive and stable economic growth. <...> Introduction It is always Another crucial point is that inappropriate discussed that industrial growth in an economy hinges on efficient financial markets, which pool domestic savings and mobilized foreign capital unexploited. inefficient financial for productive investment in an industry. <...> It is clear that without effective necessary financial institutions, productive and industrial projects may In fact, remain <...>