Impact of sanctions on bilateral trade of agricultural products between Iran and MENA region and the EU countries

Sajjad Faraji Dizaji, Farzaneh Jariani and Reza Najarzadeh

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses Generalized Method of Moments (GMM) estimation, gravity model, and dynamic panel data to evaluate the effect of the imposed sanctions against Iran on the value of the bilateral trade of agricultural products between Iran and its trading partners among the MENA and the EU countries during 2000 to 2014. The results show that the sanctions have had no effects on the trade flows between Iran and the MENA countries. However, they have meaningful impact on the Iran’s agricultural export to the EU countries, albeit they have caused a decrease in Iran’s agricultural import from this area. The annual precipitation in Iran, as a control variable, using in this paper has positive effects on the Iran’s agricultural export to the EU countries, nonetheless has negative effects on the Iran’s import from the mentioned countries. The overall country size of two trading partners’ variable has meaningful and direct effects on the mutual trade between Iran and the EU countries. According to the above outcomes, the imposed sanctions should be considered as an opportunity to the Iranian agricultural development and diversification of exports from the agriculture sector to the EU region as a wide range of non-oil products to compensate some of the costs on the Iranian economy caused by sanctions.

Keywords: Bilateral Trade of Agricultural Products; Gravity Model; Generalized Method of Moments; Dynamic Panel Data; Index of Economic Freedom (search for similar items in EconPapers)
JEL-codes: O13 O44 (search for similar items in EconPapers)
Date: 2018-07-31
New Economics Papers: this item is included in nep-agr, nep-ara, nep-cwa and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Agricultural Economics 2.12(2018): pp. 69-90

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