Investigating the Effect of Import Market Structure of Iran’s Trading Partners on Pistachio Exports: Application of Gravity Model

Document Type : Research Paper

Authors

1 Agricultural Economics Department, Ferdowsi University of Mashhad, Mashhad, Iran.

2 Agricultural economics department, University of Tehran, Karaj, Iran

Abstract

Assessing the import market structure of importers is one of the approaches to determine exporting competitiveness degree in target markets. Despite the extensive background of studies in the field of market structure, but so far, no study has looked at the role of the import market structure of partners on agricultural exports in Iran. So, given the importance of pistachio export for Iran, this paper aims to investigate the effect of import market structure of partners on Iran’s pistachio export. For this aim, the effect of import market structure of partners on Iran's exports of pistachios, which accounted for more than 90% of Iran's exports, was evaluated over the period 2001-2016 using the gravity model and balanced panel data. According to the results, increase in concentration ratio of partners had a significantly positive effect on Iran’s pistachio exports. In other words, the reduction of competition in import market of target countries leads to increase in Iran’s pistachio exports, while increased competition in the markets has a negative impact on Iran’s exports. So, it is suggested that the factors influencing Iran's pistachios exports in target markets with competitive structure should be explored and consumers of these countries should be categorized in order to provide appropriate marketing plans.

Keywords

Extended Abstract

Introduction

Assessing the import market structure of importers is one of the approaches to determine exporting competitiveness degree in target markets. Despite the extensive background of studies in the field of market structure, but so far no study has looked at the role of the import market structure of partners on agricultural exports in Iran. So, given the importance of pistachio export for Iran, this paper aims to investigate the effect of import market structure of partners on Iran’s pistachio export.

 

Methodology

To achieve the objectives of this research, the effect of import market structure of partners on Iran's exports of pistachios, which accounted for more than 90% of Iran's exports, was evaluated over the period 2001-2016 using the gravity model and balanced panel data. The sample studied in this research is 42 main importing countries: Australia, Bahrain, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Egypt, France, Germany, Greece, Hong Kong, Hungary, India, Iraq, Italy, Japan, Jordan, Kazakhstan , Kuwait, Lebanon, Luxembourg, Malaysia, Mexico, Netherlands, Pakistan, Poland, Qatar, Romania, Russia, Saudi Arabia, Slovakia, Spain, Sweden, Switzerland, Syria, Tunisia, Türkiye, Turkmenistan, United Arab Emirates, England. The data is extracted from International Trade Center (ITC), The Islamic Republic of Iran Customs Administration (IRICA), and the Food and Agriculture Organization of the United Nations (FAO). The Excel2013 software was used to calculate the import market structure of the importing countries, and then Stata14 software was used to estimate the gravity model.

 

Results and discussion

According to the results of Chow and Hausman tests, the fixed effects method is the efficient method to estimate the gravity model. The results revealed that increase in concentration ratio of partners had a positive effect on Iran’s pistachio exports. This effect is statistically significant at 1 percent level. The results showed that partners’ GDP per capita had a positive and statistically significant effect on Iran’s pistachios exports.  According to the results, geographical distance had a significantly negative effect on pistachios exports from Iran to its trading partners. This means increase in geographical distance leads to decrease pistachios trade between Iran and importing countries. The findings indicated that pistachios production had a positively significant effect on Iran’s pistachios exports. The results showed that economic sanctions and global crisis had no significant effect on pistachios exports from Iran to importing countries.

 

Conclusion

The findings suggested that the reduction of competition in import market of destination countries leads to increase pistachio exports from Iran to its trading partners, while increasing competition in these markets has a negative effect on Iran’s pistachios exports. So, it is suggested that the factors influencing Iran's pistachios exports in destination markets with competitive structure should be explored and consumers of these countries should be categorized in order to provide appropriate marketing plans.

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Iranian Journal of Agricultural Economics and Development Research
Volume 55, Issue 1
April 2024
Pages 169-181

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