Industrial Export and Industrial Sector Growth in Iran

In this paper we test the relationship between industrial export and industrial sector growth over the period 1338 to 1386 by using VECM. We carried out Johansen test for finding cointegration relations. This test shows two cointegration Equations the first relation represents the effect of industrial export on industrial sector growth and second indicates the effect of industrial export on employment of industrial sector. Results of coefficient estimations show that the growth of industrial sector in addition affected by factors such as capital and labor, also importantly affected by industrial exports which act through increasing productivity in sectors producing for export and through externalities of export for non-export sectors.