The Impact of Export Restrictions on Iran’s Non-oil Export With an Emphasis on Mining Sector

Document Type : Research Article

Authors

1 PhD student in Economics, Payame Noor University

2 Associate Professor, Department of Economics, Payame Noor University

3 Faculty member of Payame Noor University

Abstract

The present study, by estimating supply and demand functions, investigated the factors affecting Iran’s non-oil exports especially in export of mineral products with an emphasis on export restrictions. The results show that Iran’s non-oil exports have decreased as a result of the international sanctions despite the foreign exchange surge in Iran in 2012. In addition to these sanctions, the structure of Iran’s non-oil export has not undergone any manifest change in terms of the extent of the factor intensity of production, while as far as technology is concerned, the exportation of higher-technology products has been impacted by the sanctions to a greater extent.Using two stages least squares method, non-oil export supply and demand functions in the period from 1987 to 2017 have been estimated. Estimated coefficients show that foreign prices and income of other countries are the most important factors affecting Iran's export demand, and the price and income elasticities in the minerals export sector have been obtained as higher than those of the total non-oil exports. The coefficient of the dummy variable as a determinant of the effect of sanctions is negative and significant for all non-oil exports of Iran while it is positive for the export of mineral products. According to the achievements of the present study, more than two-thirds of Iran's non-oil exports are primary and resource-based products. Iran's non-oil exports are more demand-driven, and factors such as global prices, other countries' incomes, and sanctions are more influential than supply-side factors such as investment or productivity. The results of the model and the analysis of the structure show that the sanctions are ineffective in exporting mineral products.

Keywords

References

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Journal of Applied Economics Studies in Iran
Volume 9, Issue 34
July 2020
Pages 163-189

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