The Asymmetric Effects of Industrial Exports Diversification on the Instability of Iran Industrial Foreign Exchange Earnings

Document Type : Scientific paper

Authors

1 Ph.D. student, Department of Economics, Islamic Azad University of Shiraz, Shiraz, Iran

2 Associate professor, Department of Economics, Islamic Azad University of Shiraz, Shiraz, Iran

Abstract

The diversification of export commodities and the decentralization on the export of several limited products have reduced the country's foreign exchange earnings effect in global political and economical fluctuations, and this is why this issue is of particular importance. The main of this study is to examine the relationship between the diversification of industrial export goods and the volatility of foreign exchange earnings in Iran`s industry sector. For this purpose, seasonal data from 2002-2 to 2018-3 and using the NARDL method to determine the Rocket-Feather effect of diversification and concentration in industrial export have been used, and for the purpose of examining export diversification, the Hierarchical Index and Till Index have been used. The results confirm the asymmetric effects of diversification and concentration on instability of exchange earnings industry in the short and long run, so that in both models, diversity has less impact on the focus of industrial exports, so the diversification of export-oriented industrial goods has slowly stabilized foreign exchange earnings. While the concentration of export industrial goods has been strongly caused by the instability of exchange earnings. Also, the impact of global income on the instability of the industrial exchange earnings has been negatively achieved, thereby contributing to the stability of exchange earnings, while the instability of the real exchange rate, inflation rate is positive and instability have intensified. Also, the impact of investment in the industrial sector was negative but insignificant.

Keywords

References

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Macroeconomics Research Letter
Volume 15, Issue 30
January 2021
Pages 84-106

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History

  • Receive Date: 08 May 2019
  • Revise Date: 13 October 2020
  • Accept Date: 29 December 2020

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