The Impact of the Import Tariff Rate on Wood and Paper Industry Export

One of the important factors for improving economic development in Iran is attention on non-oil base export, especially wood and paper industry. The purpose of the present paper is to investigate the impact of the tariff rates on wood industry and paper industry exports during 1977-2011. To do so, vector auto regressive (VAR) model has been used and with Johansson approach, supply of export will be estimated. After this we combined the short-term and long-term relationship by using of error correlation model (ECM). The results show that appreciating tariff rate of import has negative effect on supply of wood and paper industries, so appropriate decreasing the tariff rate have been advised to policy makers. In addition, real exchange rate has positive effect on supply of wood and paper industries. Error Correction coefficients for wood and paper industry calculated, 0.19 and 0.41 respectively.