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Studying Iranian Economic Integration with OIC Members Using Gravity Model

Author

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  • Fahimifard , Seyed Mohammad

    (Mashhad Chamber of Commerce, Industry, Mines and Agriculture)

Abstract

OIC members have much potential in their economic development. Therefore, their economic integration leads to more increment for partners and deal with global system as a unique organization. Consequently, studying the convergence of OIC members and their encountered challenges has especial importance which can assist the policy makers to develop their commercial relationship and consequently employment enhancing and economic situation improvement in future planning. Therefore, in this research the commercial effects of selected OIC members during 2005-2011 were modeled using gravity method. Results showed that from the basic gravity equation, the economy size of other 6 OIC members is the main determinant in the Iranian bilateral trade relationship. Thereby, 1% increase in the economy size of other 6 OIC members, leads to 0.91% increase in the volume of trade inflows between considered OIC members.

Suggested Citation

  • Fahimifard , Seyed Mohammad, 2013. "Studying Iranian Economic Integration with OIC Members Using Gravity Model," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 8(1), pages 169-181, January.
    • Handle: RePEc:mbr:jmonec:v:8:y:2013:i:1:p:169-181
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    References listed on IDEAS

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    1. Moshi Optat Herman & Kirsten Wandschneider & Thierry Warin & Phanindra Wunnava, 2011. "Southern African Economic Integration: Evidence from an Augmented Gravity Model," The African Finance Journal, Africagrowth Institute, vol. 13(1), pages 1-13.
    2. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-153, February.
    3. Guglielmo Maria Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2009. "Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries," Discussion Papers of DIW Berlin 875, DIW Berlin, German Institute for Economic Research.
    4. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(6), pages 814-823, December.
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    1. Liudmila Popova & Ehsan Rasoulinezhad, 2016. "Have Sanctions Modified Iran’s Trade Policy? An Evidence of Asianization and De-Europeanization through the Gravity Model," Economies, MDPI, vol. 4(4), pages 1-15, October.

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    More about this item

    Keywords

    Economic integration; Gravity model; OIC; Iran;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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