An Investigation of the Impact of Non- Oil Exports on Economic Growth– Case of Iran

Abolghasem Mahdavi and Mehdi Fatemi
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Abolghasem Mahdavi: Associate professor ,Faculty of Economics ,University of Tehran
Mehdi Fatemi: MSc degree in economics , Faculty of Economics ,University of Tehran

Iranian Economic Review (IER), 2007, vol. 12, issue 2, 37-59

Abstract: Growth and economic development are the primary goals of all economies and proper trade policy is one of the essential tools to achieve this goal. Economic analysts emphasize on promoting Non - Oil Exports as a successful strategy to achieve high economic growth rates. For this reason, in economic development plans, increasing of exports is emphasized as one of the basic instruments to achieve growth and economic development. Positive effects of exports on economic growth in developed and developing countries are proved in empirical studies and it is argued that countries who have adopted export orientation have enjoyed efficient resource allocation and higher growth. In this research using Iranian statistical data for the period 1959-2003 and applying a production function model, we try to examine the impact of non - oil exports on economic growth. Estimating econometric models in the case of Iran resulted in conclusions which are rooted in inherent facts of society and economy, and reveals considerable facts of Iranian economy. Results show too weak impact on gross domestic product growth of non - oil exports and also low factor productivity in export sector relative to non - export sector . It seems that small share of non oil exports in GDP and inept combination of non - oil exports and high portion of traditional and agricultural products in total exports are the main reasons. High dependency on oil and lack of basic and reasonable planning toward non - oil exports promotion is among the other problems that non - oil export sector is facing.

Keywords: Economic Growth; Import Substitution strategy; Export Promotion strategy; Non– Oil Exports; Productivity; Externalities. (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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