Evaluation of Developing Economic Cooperation Organization (ECO)

ECO is one of the relatively successful regional trade associations over the world and Iran is also an active member since it has been founded. After collapse of the Soviet Union, a group of new independent Moslem countries along with Afghanistan has joined the ECO. Since Russia and China have strong economy and located in the ECO member regoin, this study examines the effects of joining these two countries in the ECO. Based on the econometric estimates of gravity models, in the first model in which the common border among countries under study is not considered, the joining of Russia will increase the volume of trade among the countries compared to the current situation. In the second model in which the common border is considered, the greatest trade will be achived when both countries, Russia and China, join the ECO. Based on the findings of three different models, if Russia and China join individualy, the average increase in the capcity of trade among the ECO members will be 74.0, 67.4, and 42.1 percentage.