Investigating the Spillover of Trade Partners' Uncertainty on Iran's Trade: GVAR Approach

Zahra Golmohammadi Tarzam (), Behzad Salmani () and Mohammad Mahdi Barghi Oskouei ()
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Zahra Golmohammadi Tarzam: Ph.D. Candidate in Economics, University of Tabriz
Behzad Salmani: Professor of Economics, University of Tabriz
Mohammad Mahdi Barghi Oskouei: Associate Professor of Economics, University of Tabriz

Quarterly Journal of Applied Theories of Economics, 2024, vol. 11, issue 2, 63-96

Abstract: This article mainly investigates the spillover effects of trade partners' uncertainty on the amount of Iran's exports and imports from 2000 to 2020. In this regard, the GVAR global vector autoregression model has been used to show the simultaneous impact of multi-country shocks and global shocks. The results of this research show that the value of Iran's exports and imports reacts negatively to uncertainty shocks from major trading partners, so the three countries (China, India, and Turkey) have the most negative spillover on Iran's trade value. The results also showed that the uncertainty of the following five trading partners (United Arab Emirates, Russia, South Korea, Italy, Germany, and Switzerland) does not have a significant spillover on Iran's trade. At the same time, Iran's exports and imports reacted negatively to the increase in Iran's internal uncertainty. Hence, public and private policymakers should expand their trade relations to develop exports and reduce the effects of other countries' uncertainty.

Keywords: Uncertainty spillover; International trade; Trade partners; GVAR (search for similar items in EconPapers)
JEL-codes: C23 C51 C82 F23 (search for similar items in EconPapers)
Date: 2024
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