A Study Examining the Effect of Export Growth in Iran

Abstract

Economic growth and its related factors, both theoretical and experimental aspects have been considered economists and policy makers of countries. Also, more than two decades the relationship between exports and economic growth has been had special importance. The theoretical framework was designed based on this assumption that the total product in the economy was divided into two parts, production for inside (N) and production for exports (X) and each two section production is a function of factors allocated capital and labor. The data were collected from 1961 to 2006 and were analyzed using Ordinary Least Squares (OLS) model. Hence in this article, we want to do Feder model and econometrics conventional methods to survey effect of exports on economic growth (industry & mining sector, services and agriculture). The results of this study show that each section export growth has a positive effect on the growth of value added in the same section. But the effect of export growth on the value added in industry and mining sector is more than other sectors. Together the independent variables explained 87% of the variance in the dependent variables. The remaining 13% was due to unidentified variables. In relation to that, we can conclude that explanatory power is high for the equation.

Key words: Export; Oil export; Non-Oil exports; Ordinary least square (OLS); Economic growth; Iran