Investigated determinants of Export Sophistication for industry of Iran

New international trade perspective emphasizes the role of export complexity on industrial growth. Given this importance, the main purpose of this paper is to identify the factors affecting the complexity of Iranian industrial exports using data and indicators based on the field of industrial activity. This field of activity is divided by ISIC's two-digit codes over the period 2015-2004. In this study, import rate of machinery, number of skilled labor force, R&D cost ratio and intermediate tariff rate were used. The coefficients were estimated using panel data using generalized least squares (EGLS) and fully modified least squares (FMOLS) methods. The results show that the coefficients of estimation of the model coefficients show the significant impact of machinery import rate and human capital on the export complexity of Iran's Industrial. Also, the significant relationship of other variables has not been confirmed. As far as the quality of inputs is concerned, when the tariff rate of intermediate goods is taken into account in the field of industrial activity, there is no significant effect on export complexity. The driving force behind this result is the high share of government-run oil and gas-based exports and very little reliance on imported intermediate goods. These findings show that modernizing industries by facilitating the importation of machinery and the use of skilled labor will increase the complexity of industrial exports. Therefore, the establishment of systematic capability and institutional capacity building for the correct selection and absorption of imported technologies is supported by the creation of infrastructures of industrial access to the latest technology. Finally, serious attention to the issue of education in order to raise the level of awareness of the forces employed by the manufacturing firms in attracting new technologies can provide the grounds for increasing the export Sophistication of Iran's Industrial.