The Estimation of Marquez’s Bilateral Import Function for Iran and Turkey by Using ARDL

Document Type : پژوهشی

Author

• Mostafa Karimzadeh

https://doi.org/10.22067/pm.v21i8.45872

Abstract

Abstract
The bilaterale trade flows has an important role in economic literature specially in international literature. Economic integration in different forms such as free trade areas, customs unions, common markets and economic unions indicates this important role. Considering Turkey as one of the main trade partner of Iran, this paper intends to modeling bilateral trade flows between these countries.
We applied Marquez’s(1990) bilateral import function. According to Marquez model these varibles are determinantes of bilateral imports: gross domestic product, wholesale price index, forign export price index and exchange rate. We used Autoregressive Distributed Lags (ARDL) approach to estimate of bilateral import function between Iran and Turkey for the period (1981-2010).
The finding results verified an equilibrium long run bilateral import relation between two countries. According to our econometric estimations results for both Iran and Turkey, gross domestic product and wholesale price index have positive and significant affect on bilateral import. Whereas the influnce of forign export price index and exchange rate are significantly negative.

Keywords

• Bilateral import function
• Marquez model
• Cointegration vector
• Turkey

References

[1] Appleyard, Dennis, R. and Field, J. R. Alfred, J. (2001). International Economics. Mc Graw- Hill.##

[2] Asghari, Heshmat Alah. (2010). The Analysis of Trade Potentiality between Iran and Selected Countries with Consideration of Regional Trade Agreements (RTAS). Economic Research Review, 10(2 (37)):71-93.##

[3] Bagwell, Kyle and Staiger, Robert W.(2004). Multilateral Trade Negotiations, Bilateral Opportunism and the Rule of GATT/WTO. Journal of International Economics, 63:1-29.##

[4] Baltagi, Badi H., Egger, Peter and Pfaffermayr, Michael. (2003). A Generalized Design for Bilateral Trade Flow Models. Economic Letters, 80: 391-397.##

[5] Beck, Martin and Peter, Winker. (2004).Modeling Spillovers and Feedback of International Trade in a Disequilibrium Framework. Economic Modeling, 21: 445–470.##

[6] Central Bank of The Islamic Republic of Iran’s Statistics and Publications. ##

[7] Clark , Ximena; Dollar , David and Micco, Etlejandro. (2004) . Port Efficiency, Maritime Transport Costs and Bilateral Trade. Journal of Development Economics, 75:417-450.##

[8] Egger, Peter. (2008). De Facto Exchange Rate Arrangement Tightness and Bilateral Trade Flows. Economic Letters, 99: 228-232.##

[9] Hosseini, Mir Abde Alah and Agheli Kohneh Shahri Lotf Ali. (2009). Estimating the Price and Income Elasticities of Mutual Trade among Iran and ECO by Using Panel Data. Economic Research Review, 9(2 (33)): 247-266.##

[10] Iran Statistical Yearbook (1981-2010).##

[11] Jhonston, Jack & Dinardo, John. (1997). Econometric Analysis. Prentice Hall, Fourth Edition.##

[12] Marquez, J. (1990). Bilateral Trade Elasticities. The Review of Economics and Statistics, February, pp.70-77.##

[13] Mehrabi, Leyla.(2007). A Survey on the Effects of Preferential Trade Agreement (PTA) among Iran and Central Asia Countries. Iranian Journal of Trade Studies, 11(44): 101-129.##

[14] Neumayer, Eric. (2011). On the Detrimental Impact of Visa Restrictions on Bilateral Trade and Foreign Direct Investment. Applied Geography, 31: 901-907. ##

[15] Pourmoghim, Sayyed Javad. (2003). International Economics(1). Tehran: SAMT Publications.##

[16] Sagheb, Hasan and Norouzi, Bita. (2009). A Survey on the Trade Co-operations between Iran and Turkey in Order to Conclusion a Preferential Bilateral Trade Agreement. Economic Research Review, 32:97-117. ##

[17] Tayebi, Sayyed Komail, Vaez Barzani, Mohammad and Akbari Dehbaghi, Simin. (2009). Development of Trade Flows and its Affect on Income Integration between Iran and Middle East Countries. Economic Research Review, 32:147-166. ##

[18] The Islamic Republic of Iran Customs Administration’s Statistics and Publications.##

[19] Wilhite M, Etllen. (2001). Bilateral Trade and Small World Networks. Computational Economics, 18:49-64.##

[20] Wu, Yanrui and Zhou, Zhanyyue . (2006). Changing Bilateral Trade between China and India . Journal of Asian Economics, 17: 509-518.##