Determinants of Iran's Export Diversification: Emphasis on the Cost of Entrance to Domestic and Foreign Markets | ||
| پژوهشهای اقتصادی ایران | ||
| Volume 26, Issue 89, February 2022, Pages 131-154 PDF (1.03 M) | ||
| Document Type: Research Paper | ||
| DOI: 10.22054/ijer.2021.45275.781 | ||
| Authors | ||
| Mohammad Matash Yar ahmadi1; Minireh Rafat* 2; Seyed Komail Tayebi3 | ||
| 1Ph.D. Candidate of Economics, University of Isfahan, Isfahan, Iran | ||
| 2Associate Professor, Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran | ||
| 3Professor, Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran | ||
| Abstract | ||
| This paper investigates the factors affecting export diversification in Iran. As deducted from heterogeneous trade theory, the main variables of interest in this paper's baseline specification are entry and trade costs. For this purpose, Theil index is calculated for export diversification. This index is obtained for ten selected two-digit commodity codes in the HS coordinate system. Then the basic model is introduced and estimated by the generalized least squares (GLS) method. Estimated results show that diversification depends negatively on domestic and foreign market entry costs. Therefore, reducing the unnecessary rules for setting up enterprises, customs regulations, creating transportation and financial facilities can help to improve the Iran's export diversification. | ||
| Keywords | ||
| Export Diversification; Foreign Market entry Costs; Domestic Market entry Costs; Real Effective Exchange Rate; Effective Tariff Rate | ||
| References | ||
|
amiri, H., salem, A., beshkhor, M. (2017). The persistence of inflation in Iran: a fractionally integrated approach. Economic Modeling, 11(39), 141-162, [In Persian]. Ansoff, H. I. (1957). Strategies for diversification. Harvard business review, 35(5), 113-124. Azizi, Z., Pedram, M., Azizi, P. (2018). The role of export diversification on the relationship between trade openness and volatility of economic growth in selected developing countries (1980-2015). Iranian Journal of Economic Research, 23(77), 107-138. doi: 10.22054/ijer.2018.10149, [In Persian]. Bahar, D., & Santos, M. A. (2018). One more resource curse: Dutch disease and export concentration. Journal of Development Economics, 132, 102-114. Balavac, M., & Pugh, G. (2016). The link between trade openness, export diversification, institutions and output volatility in transition countries. Economic Systems, 40(2), 273-287. Balavac, M. (2012, September). Determinants of export diversification at the export margins: reference to transition economies. In ETSG 2012 Annual conference paper. Berrill, J., Kearney, C., & O’Hagan-Luff, M. (2019). Measuring the diversification benefits of investing in highly internationalised firms. International Business Review, 28(4), 672-684. Boehe, D. M., & Jiménez, A. (2016). How does the geographic export diversification–performance relationship vary at different levels of export intensity?. International Business Review, 25(6), 1262-1272. Calantone, R. J., & Di Benedetto, C. A. (2007). Clustering product launches by price and launch strategy. Journal of Business & Industrial Marketing. Keshavarz Haddad, G., Abounoori, E., Jahani, T. (2020). Oil revenue uncertainty, sanctions and the volatility of macroeconomic variables. Iranian Journal of Economic Research, 25(82), 1-42. doi: 10.22054/ijer.2020.11906, [In Persian]. Melitz, M. J. (2003). The impact of trade on intra‐industry reallocations and aggregate industry productivity. econometrica, 71(6), 1695-1725. Mohammadi, H., & Fakari, B., (2015). Analyzing the effect of the institutional infrastructure and macroeconomic variables on the diversity of Iran's exports Using Ridge Regression. Quarterly Journal of The Macro and Strategic Policies, 3(11), 75-94, [In Persian]. Mubeen, N. & Nawoz, A. (2016). Toward measurement and determinants of expert diversification: an empricial analysis of Pakistan, Journal of commerce and social sciences, 10(3), 558-605. Nematollahi, S., Garshasbi, A. (2014). Investigation of the non-oil export diversification in the status of the international sanctions for the period (2004-2012). Quarterly Journal of Economic Growth and Development Research, 4(14), 92-75, [In Persian]. Nieminen, M. (2020). Multidimensional financial development, exporter behavior and export diversification. Economic Modelling, 93, 1-12. Oliveira, H. C. D., Jegu, E., & Santos, V. E. (2020). Dynamics and determinants of export diversification in Brazil from 2003 to 2013. Economia e Sociedade, 29(1), 29-51. Osakwe, P. N., & Kilolo, J. M. (2018). What drives export diversification? New evidence from a panel of developing countries. UNCTAD Research Paper 3. Osakwe, P. N., Santos-Paulino, A. U., & Dogan, B. (2018). Trade dependence, liberalization, and exports diversification in developing countries. Journal of African Trade, 5(1-2), 19-34. Shepherd, B. (2010). Geographical diversification of developing country exports. World development, 38(9), 1217-1228. Theil, Henri. (1972). Statistical decomposition analysis. Amsterdam: North-Holland Publishing Company. Vannoorenberghe, G., Wang, Z., & Yu, Z. (2016). Volatility and diversification of exports: Firm-level theory and evidence. European Economic Review, 89, 216-247. | ||
|
Statistics Article View: 1,083 PDF Download: 702 |
||