Iran's Trade Research Articles

Asymmetric distance and business cycles (ΑDBC): A new understanding of distance in international trade models through the example of Iran's trade corridors

We introduce a new concept of distance, and the way this could affect gravity-based trade modeling. Our motivation is twofold: a) global uncertainty in trade relations allows us to treat distance as an asymmetric shock in economic modeling; b) economies of scale in seaborne trade make geographical distance less relevant in trade models, substituted by economic distance, as this can be proxied by ocean freight rates. This, for instance, allows China to import iron ore from Brazil, at three times the distance compared to Australia. We enhance the New Keynesian Dynamic Stochastic General Equilibrium Model (DSGE) by incorporating a distance shock parameter into the transaction costs function. We test this on Iran's participation in the Shanghai Cooperation Organization as well as in the International North-South Transport Corridor. We conclude that longer physical distances do not necessarily have a negative impact on trade.

On the role of government spending, trade openness and terms of trade in Iran's agricultural growth.

Agriculture is recognized as the driving force of economic growth, especially in developing economies. It plays a crucial role in Iran's economy especially during economic sanctions as it is a source of income for rural people, food security, job creation, and foreign exchange earnings. The present study investigates the impact of government spending, trade openness, and terms of trade on agricultural growth in Iran using annual data for the period 1978-2021 by application of the nonlinear autoregressive distributed lag model (NARDL). The results confirmed asymmetry in the impact of all three variables of interest on agricultural growth. In other words, the superiority of the nonlinear specification in explaining the relationships between variables was confirmed. To be specific, a positive and negative shock to government spending affects sector growth by 0.18 and -0.05 percent, respectively in the long run. The same finding was found for trade openness with 0.22 and -0.11 impact coefficients for positive and negative shocks, respectively. Moreover, we could not find significant impact for terms of trade.

The Effect of Energy Security on Oil Export (The Case of Iran)

Energy trade plays a crucial role in the growth and development of countries, especially for IRAN as one of the world's largest exporters of oil in the world. Identifying the factors that affect exports and their development, along with promoting export performance in the energy sector should be the focus of policy and strategic planning in an internationally competitive environment. Given the importance of energy trade in Iran, this study aimed to analyze the effect of the energy security index on oil exports using the Fully Modified Ordinary Least Square (FMOLS) method. The findings of study reveal that oil exports are negatively affected by oil energy security, i.e., as this unit deteriorates, the index of oil exports increases by over 3%. Furthermore, the study found that GDP and the exchange rate have a positive impact on oil exports, whereas energy prices and population density have an adverse impact. Furthermore, the study's results demonstrate that GDP and exchange rate have a positive effect on oil exports. Based on the findings of this study, first, it can be argued that an independent and powerful institution is essential to monitor and enforce policies, standards, and regulations to enhance energy efficiency. Second, upgrading old technologies, developing new ones, scaling up actions on energy efficiency, and increasing public knowledge and understanding about energy can reduce energy intensity and increase savings. Last but not least, a transition from high-consumption to low-consumption technologies designed to reduce energy consumption and maximize efficiency can increase oil exports. Keywords: Energy Exports, Energy Security Index, Energy Consumption, FMOLS Method JEL Classification : Q4, Q42, Q43, Q47 DOI: 10.7176/JETP/13-2-01 Publication date: April 30 th 2023

Iran's Trade with Neighbors: Sanctions’ Impact and the Alternatives

AbstractThis article investigates whether sanctions have changed or influenced Iran's trade patterns, focusing on neighboring countries. The study concentrates first on the United Arab Emirates (UAE), considered Iran's main regional partner. We hypothesize that the sanctions should have had a negative impact on Iran's trade with the UAE, as the latter cooperated with US policies toward the Islamic Republic. By contrast, sanctions were likely to positively influence its trade with Qatar. Indeed, the research shows that Iranian trade with Qatar increased significantly after 2017, while its trade with the UAE declined as a result of the measures adopted toward Iranian businesses in Dubai. However, the results also indicate that despite the UAE's anti‐Iranian stance, the country still constitutes a major trading partner for the Islamic Republic, which is trying to mitigate the paralyzing impact of sanctions by developing trade relations with Qatar and other countries, such as Turkey.

Efforts to Improve the Transit Trade in Iran in the Republic Period (1923-1950)

Milattan önce ve sonra Asya’nın Avrupa ticaret merkezleri ile bağlantısını sağlayan transit yolu bütün Anadolu’yu kat ederek İstanbul’dan geçiyordu. Bilahare bu taşımacılığın önemli bir kısmı deniz yollarına intikal etti. Osmanlı Devleti döneminde Küçük Kaynarca Antlaşması’na kadar yabancı gemilere kapalı olan Karadeniz, bu antlaşma ile Rusların Karadeniz’e girmesiyle uluslararası ticarete açıldı. İngiltere ve İran’ın Trabzon üzerinden ticaret yapmaya başlaması, 19. yüzyıl başından itibaren Karadeniz ticaretinin canlanmasını ve Doğu Karadeniz’den İran’a uzanan yolların da stratejik bakımdan önem kazanmasını sağladı. Böylece Doğu Karadeniz limanlarından İran’a kadar transit ticaret yolları işlerlik kazanmaya başladı. Bu yollar Avrupa’nın mamul mallarını Doğu’ya ve Doğu’nun hammaddelerini Avrupa’ya ulaştıran Trabzon-Erzurum-Tebriz yolu ile Sohum-Poti veya Batum-Tiflis-Tebriz yolu idi. Bu çalışmada ele alınacak yol aynı dönemde faal olan Trabzon-Erzurum-Tebriz yoludur. Bir zamanlar bu yolda kervanlarla yapılan İran transit ticareti 20. yüzyıl başlarından itibaren kamyonlar vasıtasıyla yapılmaya başlandı. Kervanlarla kamyonların rekabetine sahne olan bu tarihi İran transit ticaret yolu I. Dünya Savaşı’ndan önce gayet işler bir haldeydi. Savaşla birlikte bu durum değişti. Türkiye üzerinden geçen İran transit ticaret yolu canlılığını yitirmeye ve buradan yapılan ticaret Beyrut ve Basra limanlarına doğru kaymaya başladı. Böylece Trabzon-Erzurum-Tebriz yolu da ticari canlılığını yitirdi. Canlılığını yitiren bu yolu, tekrar eski ticari canlılığına kavuşturmak için 1930’larda Türkiye Cumhuriyeti tarafından birtakım çalışmalar yapıldı ve projeler geliştirildi. İşte bu çalışmada Cumhuriyetin ilk yıllarında Trabzon-Erzurum-Tebriz yolunun tekrar eski işlerliğine kavuşturulması için yapılan faaliyetler ve özellikle Türkiye üzerinden geçen İran transit ticaret yolunun Cumhuriyetin ilanından itibaren 1950’lere kadarki durumu ele alınarak yolun Cumhuriyet döneminde geçirdiği evreler ve rakip yollarla rekabeti mukayeseli bir şekilde ortaya konulacaktır. Arşiv, ulusal ve yerel basından elde edilen bilgi ve belgelere dayanan çalışmada tetkik eserlerden de faydalanılmıştır.

The Effect of Institutions on Iranian Pistachio Exports to Asian Blocs (Spatial Econometric Approach)

Introduction: Iran is as one of the largest producers and exporters of pistachio in world markets. Considering that the export of this commodity is one of the main sources of foreign exchange earnings and has an important role in reducing the government's general budget dependence on oil revenues, identifying the factors affecting on pistachio exports to world markets is essential and it can lead to the improvement of the country's position in the global pistachio market. Institutional conditions are the factors affecting on the export of goods, including pistachio from Iran to world markets.Materials andMethods: This paper examines the effect of institutions on Iranian pistachio exports to Asian blocs using the spatial econometric method and Mixed Regressive-Spatial Autoregressive Model. The research pattern is a regression model with panel data during the time period 2000-2015 from Iranian trade with Asian blocs.Findings: The results of model estimation are shown International Country Risk Guide (ICRG) variable as an indicator of institutions has a positive and significant effect on Iranian pistachio exports to Asian blocs.Conclusion: The International Country Risk Guide index has three types of political, financial and economic risk of the country, according to the findings of the article as one of the most important obstacles to the expansion of investment and pistachio trade in Iran. Reducing this risk brings political, financial and economic stability will increase Iranian pistachio exports.

The Development of the Transit Trade of Iran in the Triangle of Russia, Ottoman Empire and Iran In the second Half of the 19th Century

The transit trade of Iran had great importance for both the Ottoman Empire and the European economies for accessing raw materials. This trade had largely been under the control of the Ottoman Empire until the last quarter of the 18th century. The loss of this monopoly according to the Treaty of Kuchuk Kainarji in 1774 and the gradual domination of Russia over the Caucasus turned the transit trade of Iran into a big problem between the Ottoman Empire and Russia in the following period. In this study, the course of the transit trade of Iran in the 19th century will be evaluated with its development in different areas within the context of the policy measures taken by the Ottoman Empire to prevent the diversion in the transit trade and taken by Russia to attract this trade to its territory. Concordantly, the development of regional trade under this competition is aimed to be set forth using primary sources. The findings show that the commercial activities in the north of Iran were gradually seized by Russia, and the Ottoman government could not realize the attempts needed under the constraints it had, which resulted in and the emergence of alternative routes between the West and Iran.

International trade and air pollution damages in Iran

In recent dacades,the unbalanced pattern of foreign trade and its impact on the unfair emission of pollutants in different countries, has been considered by policymakers.in addition to the economic effects of trade, its environmental effects should also be considered in calculating the real trade balance or green trade in the present study, using the input-output technique. monetary losses resulting and the added value created in the trade process, are estimated in nineteen sectors. The net environmental damage is equal to 4.8% of the net value added and 1.7% of Iran's trade deficit in 2019. The results show that Iran, despite having a trade deficit, is a net importer of pollution. Estimates in the second stage confirm the higher export losses ($ 60.2) compared to the avoided import losses ($ 38.7) for each monetary unit of trade. In fact,Iran is turned to “port of pollution” because of it’s structure. In terms of trade relations with other countries, most of the pollution was imported from Iraq and Afghanistan, while the most polluted exports were to Germany, Switzerland and France, respectively. In trade with China, there are also reciprocal effects (lower income trade and greater environmental damage). Given the current difficult economic and political conditions, the best strategy to simultaneously achieve economic and environmental goals is to develop import alternatives in the groups of pharmaceuticals and health, agriculture, recreational services, arts and tourism, wood, paper and leather textile products. Because they have the lowest proportion of environmental damage to value added among economic groups with a negative trade balance. Also, the minimum amount of environmental damage for each monetary unit of trade is observed in the mentioned groups. The comparison of the study findings with the results of other researches confirms the high potential of the pharmaceutical and health materials group in achieving both economic and economic goals during import substitution policy.

Enterprising Empires: Russia and Britain in Eighteenth-Century Eurasia. By Matthew P. Romaniello (New York, Cambridge University Press, 2019) 304 pp. $99.99

<i>Enterprising Empires: Russia and Britain in Eighteenth-Century Eurasia</i>. By Matthew P. Romaniello (New York, Cambridge University Press, 2019) 304 pp. $99.99

India–Iran Trade Relations Under the Shadow of USA Sanctions

India and Iran have a long history of cooperation on various issues ranging from economic to strategic importance. However, the present phase of cooperation is as old as end of the cold war and reached a peak during the period 2001–2003 with the Tehran and Delhi declarations, which established a substantial set of framework for enhanced cooperation. In the present times given the changing regional and global economic and security conditions, many attempts have been made by both countries to increase their cooperation. Since Islamic revolution, Iran faces continuous confrontation and sanctions from the West and the USA. Iran has continuously tried to improve its relations with its neighbours and other friendly countries to minimize the impact of these sanctions which are badly affecting its economy. India, on the other hand, has been growing at a faster pace from last many years which has increased its energy requirements. Given Iran’s nuclear programme and its confrontation with the West and India’s energy requirements, both countries are working together to sustain their economic and energy cooperation from last many years. In 2015, both countries signed a memorandum of understanding worth USD 195 million for the development of Chabahar Port situated in south-eastern Iran and India agreed to make the investment in infrastructural development of Iran. Through this port, India will get easy access to Central Asian and Afghanistan which will increase its trade relations with these countries. The aim of this research article is to examine the impact of sanctions on Iran due to its nuclear programme on trade relations between India and Iran by using threshold autoregressive model and using trade variables including exports and imports. JEL Codes: 00, 05, 05

Investigating the Effect of International Sanctions on Iran's Trade Structure: A Network Theory Approach

After World War II, countries have used sanctions against target countries instead of military attacks to force them to change their policies. Particularly, following Iran revolution, Iran was sanctioned by the U.S. and its alliances which the strictest sanctions were imposed on Iran in 2012. From the Joint Comprehensive Plan of Action on, most of the levied sanctions were supposed to be lifted in 2016 by the United Nations which could alleviate the effect of sanctions on Iran economy. With regards to the effect of sanctions on countries economy, it is crucial to study the sanctions effectiveness on Iran economy. Therefore, this study compares the structural economic position of Iran in the international trade network in 2012 and 2016. Also, it investigates the effectiveness of international sanctions on Iran's structural position in the international trade network. Results show that Iran is not only a periphery in the international trade network, but also its structural position in the international trade network is not affected significantly by the sanctions.

Exotic ornamental fishes in Iranian inland water basins: an updated checklist

The number of exotic freshwater ornamental fish species released from the aquarium trade in Iran has been increasing in recent years. All recorded exotic aquarium fishes are listed here, including 8 species in 7 genera, 5 families, and 5 orders. The introduced species belong to the Neotropical, Nearctic and Palearctic fish elements. Their distribution ranges within Iranian freshwater ecosystems are given, and the presence of Koi (ornamental Cyprinus carpio) are recorded for the first time from Iranian inland waters. Eradication programs need to be accompanied by a public awareness campaign to ensure that the aquarium trade and hobbyists do not release these pet fishes into natural habitats.

Effects of Iran's WTO Accession on the Cement Industry: A Dynamic Disequilibrium Adjustment Model (DDAM) of Simultaneous Equations

Many companies around the globe are re-examining their business operations to explore profitable growth in international markets.The attractiveness of the membership in WTO can be recognized not only in the growing number of its members but also as a result of increasing access to potential markets around the world. Iranian economy suffers from huge inefficiency in its trade relationships with other countries due to import compression policy and strict import controls. Iran's import profile is heavily skewed towards those tradable that are not strongly under the effects of WTO, indicating protectionism policy in the industry sector. Besides the need for easing protectionism, the emphasis placed on the growth of non-oil exports and reducing oil dependency as an objective in the five-year development plans provides a strong argument for joining WTO. Measuring technical efficiency in the cement industry in Iran suggests that companies with export-orientation policy have potentials to succeed in increasing their technical efficiency.The new discovering realm of WTO for Iran's trade policy has been evaluated in this paper. The pros and cons for joining induced us to investigate the effects of Iran's membership on the cement industry. By designing a dynamic disequilibrium adjustment model (DDAM), we use annual data for the period 1963-2002 to estimate a simultaneous system of econometric equations including cement supply, exports, imports, and consumption functions in order to quantify the effects of joining on the cement industry of Iran. One of the main challenges confronting the Iranian cement industry is to improve the competitiveness of the industry by reducing the subsidies, removing restrictions, and price controls. Indeed, the experience of other counties after joining WTO portrays a conflicting profile on the effects of accession on domestic economies. While some countries have developed important trading partners, others have suffered due to the loss of domestic industries. In this paper, we intend to examine the hypothesis of whether reducing the tariff rates will promote Iranian cement industry. The results reveal that joining WTO has negligible effects on consumption, production, and exports, though, will raise imports substantially.

The Effects of Oil Price Shocks and Economic Fluctuations of Trading Partners on Iran's Ports Throughput

This study aims to estimate the effects of oil price shocks on seaborne trade in Iran; in particular, port throughput of three leading ports through economic fluctuations of three major trading partners of Iran, based on quarterly data for the period of 1999Q2 to 2018Q1. We apply a standard vector autoregressive (VAR) approach using Cholesky decomposition. The results indicate that with increasing oil revenues in short-run, seaborne trade be further directed towards Shahid Rajaei port while rising oil revenues changes the combination of goods handled in Emam Khomeini and Bushehr ports. In the long run, the share of oil price fluctuations in explaining the variations of Shahid Rajaei port throughput is higher than the other two. In fact, increases in oil revenues cause an increase in the volume of industrial and containerized seaborne cargo trade.

The effect of economic sanctions on the volume of trade in the agriculture sector of Iran and business partners in the EU

Iranian economy was under pressured during the period of international trade sanctions. This paper investigates the effect of the economic sanctions on the bilateral agriculture trade of Iran with ten main trading partners in European Union between 2001 to 2015. A modified gravity model is used as an empirical international trading model and panel data are used for investigating the effect of sanctions. Findings/Originality : In the absence of sanction, the effect of all independent variables, except for population, is as expected by the theory. Under the sanction the effect of GDP and population is lower than those of without sanction. The effect of foreign exchange fluctuation gets more intense during the sanction due to instability of financial sector. Distance, however, is not a significant variable to explain the bilateral trade both in the absence and under the sanction. The weak sanction period lowered the bilateral trade by 7.5 percent lower, but unexpectedly it was 12 percent higher during the strong sanction period.

The Application of Complex Networks Analysis to Assess Iran's Trade and It's Most Important Trading Partners in Asia

The Application of Complex Networks Analysis to Assess Iran's Trade and It's Most Important Trading Partners in Asia

Assessing the Effective Factors on Agricultural intra-Industry Trade Between Iran and Asian Trading Partners

Intra industry trade compared to inter-industry trade imposes a lower cost on economic, so identifying the effective factors is important. Since Iran’s Agricultural sector has high potential in production and trade, the aim of this paper is identifying the determinants on agricultural intra industry trade between Iran and Asian partners as well as assessing the factors in ECO (including Iran) and ASEAN (without Iran) trade agreements over the period of 2001-2014. For these purposes, a gravity model is used. The results indicated that difference in per capita GDP (income), the difference in agricultural land, and RTA have positive and significant, while distance and border have a negative and significant effect on agricultural intra industry trade between Iran and Asian partners. Based on the results, difference in per capita GDP (income), economic difference and common border are the factors reducing intra industry trade of Iran with ECO, while differences in per capita GDP (income) and difference in agricultural land have an increasing impact on intra industry trade in the agricultural sector of Iran with ASEAN countries. So, it is suggested that appropriate policies such as membership in larger trade agreement implement in order to strengthen Iran’s agricultural intra industry trade.

Main Characteristics of Bilateral Trade between Iran and South Korea: Focusing on Trade Diversification

Although bilateral trade between Iran and South Korea reached a maximum of more than 12 billion USD in 2017, the withdrawal of the US from the Iran nuclear deal on May 2018 and its new plans for re-imposing sanctions on Iran may affect Iran-Korea bilateral trade. This demonstrates how Iran's trade relations are somehow fragile against sanction, and due to this fact, the expansion of non-oil exports can be considered as a major goal of Iran's development plans in trade and business. In this regard, it is essential to identify prospective areas to enhance non-oil exports and diversify trade between Iran and its trading partners like South Korea. Hence, this paper explores the main characteristics of bilateral trade between Iran and South Korea with a special focus on trade diversification. The implication of this study is that lifting embargos is not as important as addressing the technology gap when it comes to diversifying Iran-Korea trade relations. A policy of deep cooperation in investment and technology transfer is recommended in this respect. This paper specifically suggests to develop a deep level of cooperation in the two countries' SME activities in order to reduce the existing technology gap and promote trade diversification.

Study of Domestic and International Virtual Water Trade in Iran

Study of Domestic and International Virtual Water Trade in Iran

National Reputation: Concepts, Challenges and Approaches

Organizational reputation has been raised and explained by researchers in recent years. But theorizing of national reputation, as a new subject, is in its early stages. The aim of this study is to propose a conceptual model for national reputation. This model can be used as a template by policy makers and researchers in various fields, especially the economy and trade of Iran. The method used in this research is qualitative grounded theorization. In order to identify and define the concepts related to national reputation, the corresponding literature has been studied in the first step. In the next step, the national reputation model has been clarified through interviews with official executives, private sector executives and management professors, based on the grounded theory research method. In the end, the nation branding challenges and strategies are discussed for the implementation of the model.