Economics at your fingertips  

The Impact of Trade Openness on Poverty in Iran: Simultaneous Equations System Method

Sedigheh Atrkar Roshan () and Zahra Hashemi ()
Additional contact information
Sedigheh Atrkar Roshan: Associate Professor of Economics, Alzahra University
Zahra Hashemi: MA in Economics, Alzahra University

Quarterly Journal of Applied Theories of Economics, 2016, vol. 3, issue 1, 183-204

Abstract: It is often argued that open economies grow faster than closed economies. Considering the potential and significant role of trade on economic growth, the purpose of this study is to investigate the relationship between trade openness and poverty during the 1973 to 2013 in Iran. Theoretical literature argued that, trade openness affects poverty through multifaceted channels, andthere is also evidence that these channels may often interact dynamically over space and time. Hence the trade-poverty linkage is rather complex and heterogeneous, and the single-equation approach may have difficulties in taking into account these all impacts. Therefore, in order to consider the impact of these multiple channels of influence, simultaneous equations system approach and three-stage least squares estimator is applied in this research. The findings of this study indicate that, trade openness leads to increase economic growth, and through economic growth it then affected poverty indirectly. The results also show a direct relationship between real GDP and inequality. So that inequality is increased along with economic growth during the period under study. Based on the results of this research, globalization had also an increasing effect on poverty during the study period. Finally, trade openness directly increased poverty during the period of the study too.

Keywords: Trade openness; Poverty; Inequality of income distribution; Economic growth; Simultaneous equations; Three-Stage Least Square Estimator (3SLS). (search for similar items in EconPapers)
JEL-codes: D63 F13 I32 O47 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link) Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Quarterly Journal of Applied Theories of Economics is currently edited by Sakineh Sojoodi

More articles in Quarterly Journal of Applied Theories of Economics from Faculty of Economics, Management and Business, University of Tabriz Contact information at EDIRC.
Bibliographic data for series maintained by Sakineh Sojoodi ().

Page updated 2018-04-06
Handle: RePEc:ris:qjatoe:0039