Bilateral Trade
Samad Aziznejad; Fathollah Tari; Seyed Mohammad Reza Seydnourani
Volume 1, Issue 3 , January 2012, , Pages 133-99
Abstract
Import, which is the basis for significant effects on economics, is influenced by various factors that are essential to be recognized and examined. One of the issues that can influence the demand for import in each country is joining the World Trade Organization (WTO) which can, in fact, affect the demand ...
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Import, which is the basis for significant effects on economics, is influenced by various factors that are essential to be recognized and examined. One of the issues that can influence the demand for import in each country is joining the World Trade Organization (WTO) which can, in fact, affect the demand for import through strategies such as decreasing tariff rates and increasing the extent of mergers in international commerce and relative prices (domestic and foreign prices). In this regard, and considering the high proportion of capital and intermediate commodities in the total import of the country, this article evaluates the effects of Iran joining WTO on the import of capital-intermediate commodities, using Vector AutoRegressive method using the data during 1971-2008. The findings of the study reveal that at long term, the import of such commodities has had high sensitivity towards international commerce and merger in international economies and little sensitivity towards tariff rates and relative prices during the above-mentioned period. The findings of both long-term and short-term periods confirm each other. Also the impulse response function and variance decomposition analyses show that the effect of one standard error which shocks involvement in import demand of studied goods, is approached to zero in three years and integration of international trade is most effective on variations of that demand.
