Asian Journal of Development Matters
Year : 2010, Volume : 4, Issue : 1
First page : ( 105) Last page : ( 111)
Print ISSN : 0973-9637.

Impact of Domestic Demand and Exchange Rate on Medium Firms’ Export Performance in Iran

Mirbargkar Seyed Mozaffar

Department of Studies in Economics and Co-operation, University of Mysore, Mysore, India.

Address for Correspondence: E-mail: mirbargkar@yahoo.com

Abstract

One of the key factors in a stable economic growth is the development of exports. Iran is heavily dependent on the export of oil and gas, which account for up to 82.5% of the country's total exports and around 40–50% of the government budget. The share of industrial medium enterprises in export is the less than 5% of Iran's total non-oil exports; like a thin cut of a tiny cake. But, the study at hand makes clear that the industrial medium enterprises has tremendous scope for growth in Iran and by that token has a great potential for export promotion. This study, by looking at the potential of medium industries in the country, attempts to examine the effects of domestic demand and exchange rate on competition, so that it can suggest some issues to increase the exports potential of medium industries. In this article, at first the model of export of Iranian medium Industrial enterprises will be discussed and after that, results of estimated models will be presented and analyzed by using the panel data method.The results suggest that the main reason for the low share of medium industries in Iran in export of industrial goods is: “the natural tendency of medium enterprises to the internal home markets and the attention to the home markets and lack of production more than the internal demands”.

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