Trade Evaluation of Iranian Agricultural Sector, Using Gravity Model and Panel Data

Document Type : Research Article

Authors

• M. Zarif ¹
• M. Salarpour ²
• A. Karbasi ³

¹ university of zabol

² Department of Agricultural Economics, Zabol University, Zabol, Iran

³ Agricultural economic, Agricultural Faculty. Ferdowsi university

10.22067/jead2.v1390i2.9709

Abstract

Abstract

This study uses gravity model to examine the most important determinants of was agricultural trade. To This aim, import and export statistics of Iran agricultural products for the period 1380 to 1387 was provided from Iran customs organization and other information was obtained from different internet bases. Random effects estimating and Hausman test ratio result in fixed effects model, which determined the effects of dependent variables over independent ones. First, the effect of independent variables such as GDP, per capita income, Linder effect, geographic distance, exchange rates, exchange rate uncertainty and dummy variable of border was determined on each import and export of agricultural sector. Then dummy variables related to the regional integrations of Organization of Islamic Conference and the ECO were also applied in model. The results showed that the GDP of commercial Partner has positive effect on export and import of agricultural trade but it is smaller for OIC members. Linder effect, geographical distance and exchange rate uncertainty have negative effects on both export and import of Iran agricultural products. Per capita income had a negative effect on export, while it had a huge positive effect on import. real exchange rate had positive but very small effect on import and negative effect on export of Iran agricultural sector. The results showed that cooperating with the OIC members lead to an increase in import and export of Iran agricultural products and it would reduce negative effects of exchange rate uncertainty. Because of the opposite relation between geographical distance and export or import is suggested reinforcement of international transporting infrastructures. In addition Islamic countries Which have shorter geographical distance from Iran have high commercial potential and the necessity for concluding local contracts with them is clearly understood.

Keywords: Trade, Agricultural sector, Exchange rate uncertainty, Gravity model

20.1001.1.20084722.1390.25.2.6.8

---