The effects of globalization on the imports of wood products in Iran

Abstract

Globalization has not affected Iran substantially, even though it possesses the largest economy outside the World Trade Organization (WTO). In the present study, the level of international trade (LIT) and intra-industry trade (IIT) were considered as two globalization indices. Adding the two indices to the import demand functions of three categories of wood products (wood raw materials, semi-finished wood products, and finished wood products), the effect of the globalization of various wood products sectors on imports of related wood products was evaluated. The findings reveal significant relationships between the import of wood as raw material and the globalization indices of semi-finished wood products and finished wood products. The import of finished wood products was positively correlated with the IIT of semi-finished wood products. However, globalization indices had no impact on semi-finished wood products imports. Other results indicate that the three categories of wood products were significantly different in terms of the mean of globalization indices (p < 0.05). Compared to the other categories, finished wood products had the highest LIT and lowest IIT, suggesting a large amount of import-based trade of the given products relative to domestic production in Iran. Overall, semi-finished wood products and finished wood products were placed in a higher stage within the LIT–IIT framework, implying that these sectors in Iran are more globalized.