Authors
1 .A. Student of Economics, University of Mashhad
2 M.A. Student of Economics
Abstract
Globalization is a dynamic movement that is taken all aspects of the economy, or affecting them. It implies a process which, during that, gradually borders disappears, and synchronously international transactions increase. For developing countries who, are not able to enter into globalization process, in short term, economic integration and the formation of regional trade blocks, is the most effective way to open economy and integrate into global economy.
This paper deals with the economic integration among Iran and Latin American countries in the shape of trade block formation. In fact, the main purpose of this paper is to investigate the success or failure of the trade block and its effects on bilateral trade between Iran and these countries. To this need, the Generalized Gravity Model is used, also Panel Data Method is used to estimate the model.The results express that economic cooperation between Iran and Latin America, remarkably increases bilateral trade between the two sides. In other words, trade block leads a 89 percent increase in trade among member countries.
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