Interactive Industrial Exports of Iran and the Impact of Real Exchange Rate Changes

Iran’s economy requires to support export exponent of manufacturing industries to reach favorable vision of growth based on trained human resource capacity and available natural resources. By adopting appropriate decisions, the government can provide areas for export production mobility. The aim of this study is to investigate the impact of real exchange rate changes on industrial export of Iran with its export partners during 1996-2016. We also investigate the impact of other factors such as tariff rate, the economy size of trading partners on it. So far little research has been done on the relationship between real exchange rate and industrial exports in the form of panel data (With fixed effects and using FGLS) with more than 124 trading partners. Findings show that a) the policy of weakening the national currency leads to the growth of industrial export performance, b) other factors such as tariff rate and the economy size of the country can affect it. Among the examined variables, the impact of the economy size of investigating countries is very strong and sensitive on industrial export. The perfect comprehension of this relationship can help the export policymakers to set appropriate policies to encourage and expand industrial export.