The effect trade and exchange rate policies on the export of stone fruit in Iran

The purpose of this study is to investigate the effect of foreign exchange rate and trade policies on crop exports in Iran. Regarding foreign exchange policies, exchange rate volatility index and the dummy variable of currency uniformity policy were considered, while economy openness index as well as trade bias coefficient index were studied for business policies. Logarithmic model of export supply function based on ARDL and error correction model were used to estimate long term and short term relations between variables. The research data were collected from the websites of the International Trade Statistics Database and the Central Bank of Iran from 1997 to 2014. The results showed that commercial deviation coefficient, real exchange rate, economy openness, stone fruits export value in previous years, domestic product price and the dummy variable of currency uniformity policy variables all have a positive effect, in the long term, on Iranian stone fruits export. The coefficient for error correction model equals -0.42, which is quite significant indicating a very high modulation pace to a long term equilibrium. In addition, the results revealed that, in case of shock and distortion in balance in each period, 0.58% of short term imbalances is adjusted to achieve long term equilibrium.