Financial development in resource-based economies such as Iran plays an important role in sustaining economic growth, but is affected by fluctuations in oil revenues and weak export diversification. This study aims to investigate the nonlinear effects of oil revenues and non-oil exports on financial development in Iran. Time series data from 1993 to 2023 extracted from OPEC, the Statistical Center of Iran, and the World Bank were used, and the smooth transition regression (STR) model in the R software environment was used for analysis.
The results show that oil revenues and non-oil exports have a positive and significant effect on financial indicators in both exchange rate regimes (high and low). In contrast, inflation and exchange rate fluctuations have a negative and decreasing effect on financial efficiency. Also, GDP per capita and trade openness play a supporting role in strengthening financial development. The findings show that in unstable economic conditions, the effect of these variables is intensified, emphasizing the need for income diversification policies and volatility management. The use of sovereign wealth funds and targeted financial support for non-oil exports can lead to increased financial system stability.