Exchange Rate Uncertainty and Transport Value added

According the importance of the transport sector in the economic structure and its crucial role in process of trade and other economic variables, identifying the affecting variables on the activities of these sectors have a high necessity. Therefore, the main purpose of this study is to investigate the effect of exchange rate uncertainty on the value added of the transportation sector from the reducing trade channel. For this purpose, the data for Iran economic in period of 1991-2017 are used and the Bayesian Vector Auto-Regressive (BVAR) model applied to estimates the coefficients. In this study, the Generalized Auto-Regressive Conditional Heteroskedasticity (GARCH) model is used for calculation of uncertainty in the exchange rate. Results indicate on the negative and statistically significant impacts of exchange rate uncertainty on the transport value added. Results also show that GDP and oil revenues have the significant positive impact on the transport value added, but transport price level didn’t have a significant impact.