Investigating the Spillover of Trade Partners' Uncertainty on Iran's Trade: GVAR Approach

Document Type : Research Paper

Authors

1 University of Tabriz

2 Department of Economics and Management, University of Tabriz, Tabriz, Iran

10.22034/ecoj.2024.59209.3252

Abstract

The main purpose of this article is to investigate the spillover effects of trade partners' uncertainty on the amount of Iran's exports and imports from 2000 to 2020. In this regard, the GVAR global vector autoregression model has been used to show the simultaneous impact of multi-country shocks and global shocks. The results of this research show that the value of Iran's exports and imports reacts negatively to uncertainty shocks from major trading partners; so the three countries (China, India, and Turkey) have the most negative spillover on Iran's trade value. Also, the results showed that the uncertainty of the next five trading partners (United Arab Emirates, Russia, South Korea, Italy, Germany, and Switzerland) does not have a significant spillover on Iran's trade. At the same time, Iran's exports and imports reacted negatively to the increase in Iran's internal uncertainty. Hence, public and private policymakers should expand their trade relations to develop exports and reduce the effects of other countries' uncertainty.

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Quarterly Journal of Applied Theories of Economics

Articles in Press, Accepted Manuscript
Available Online from 01 August 2024

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