Determinants of Iran's Export Diversification: Emphasis on the Cost of Entrance to Domestic and Foreign Markets

Matash Yar Ahmadi, Mohammad; Rafat, Minireh; Komail Tayebi, Seyed

doi:10.22054/ijer.2021.45275.781

Document Type : Research Paper

Authors

¹ Ph.D. Candidate of Economics, University of Isfahan, Isfahan, Iran

² Associate Professor, Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

³ Professor, Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

https://doi.org/10.22054/ijer.2021.45275.781

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

20.1001.1.17260728.1400.26.89.5.4

Main Subjects

international trading

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Determinants of Iran's Export Diversification: Emphasis on the Cost of Entrance to Domestic and Foreign Markets

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Volume 26, Issue 89 - Serial Number 89February 2022Pages 131-154

Volume 26, Issue 89 - Serial Number 89
February 2022
Pages 131-154