Investigating the Effect of Financial Development on Supply of Non-Oil Exports Using ARDL Model: The Case of Iran

The present research tries to examine the effect of financial development on supply of non-oil export using the Auto-Regressive Distributed Lags (ARDL) model in Iran during the period (1357-88). In the model, relative price of non-oil export, GDP without oil, and financial deepening index are introduced as the determinants of supply of non-oil export. The results show all of the autonomous variables have expected signs and are significant in short run. The mentioned variables also have the expected sign and except financial deepening index are significant in long run. The results indicate that although financial development affects on supply of non-oil export in the short run. But it does not have any effect on supply of non-oil export in the long run. It emphasizes that financial and capital sector in trade especially in export is passive. Therefore, for the efficiency of this sector, it is necessary to modify the rules, regulations, and supervision. Especially, for our country which is accessing WTO.