Appropriate Trading Partners for Iran in Importing Machinery and Transport Equipment: A Network Theory Approach

Document Type : Original Article

Authors

1 PhD in Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran,

2 Associate Professor of Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran

Abstract

Trade is crucial to international interaction, and spreading fluctuations among countries. Regarding the importance of this issue for Iran, appropriate trading partners in machinery and transport equipment in import sector are examined using network theory. Therefore, by constructing a composite index based on the structural network measures, potential trading partners for Iran are introduced. The potential trading partners' characteristics are twofold. First, the proposed trading partners can improve Iran's structural position in the international trade network. Second, the potential substitutes for current trading partners are beneficial in case current trading partners alleviate or stop their trade relations with Iran. Therefore, substituting or strengthening trade links with this group of potential trading partners can lead to an insignificant change in Iran's structural position in the international trade network. Results show that half of current major trading partners of Iran are among powerful trading partners in the international trade network with high structural characteristics. Also, potential trading partners and their substitutes are introduced using the composite index. Results imply that strengthening trade links with China, Republic of Korea, Germany, France, and Japan can enhance Iran's structural position in the trade network. Moreover, forming and consolidation of the trade linkages with the potential alternatives for UAE, Russia, Italy, Turkey, and India could lead to preservation of Iran's structural status throughout the international trade network. Trading with other potential substitutes could maintain Iran's structural position in trade networks which is more pronounced in case of any disruptions.

Keywords

References

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