The Impact of Energy Price Gap on the Import Value of Iran from Major Trade Partners: Spatial Panel Data Approach

Document Type : Original Article


1 Associate Professor of Economics, Faculty of Economics, Kharazmi University

2 Assistant Professor of Economics, Faculty of Economics, Kharazmi University

3 MA in Energy Economics, Faculty of Economics, Kharazmi University


The relationship between energy price gap and import value of Iran from major trade partners is one of the main issues in international trade literature and has been considered empirically in recent years. So, in this paper by using Sato and Dechezleprˆetre index, the energy price gap has been calculated and then, the empirical model has been estimated between Iran and major trade partners during 2000-2016. The empirical findings of this study reveal that the spillover effect has been confirmed for spatial Durbin model. Moreover, the energy price gap has negative and significant impact on the import value of Iran from main trade partners. In other words, with increase of energy price gap, the import of Iran from its major trade partners decreases. The other findings of this paper indicated that the similarity index and real effective exchange rate variables have negative and significant impact on the import value of Iran from main trade partners.  Moreover, energy price gap between Iran and major trade partners during the period of study is asymmetric. That means the increase and decrease effects of energy price gap on the import value of Iran is not equal.    


-       Ahmadian, M. (1999). Oil Economics in Theory and Practice. Research Institute of Economics, Tarbiat Modares University (In Persian).
-       Aldy, J.E., & Pizer, W.A. (2011). The competitiveness impacts of climate change mitigation policies. NBER Working Papers 17705. National Bureau of Economic Research, Inc.
-       Anselin, L. (1988). Spatial Econometrics: Methods and Models. Kluwer Academic Publisher.
-       Anselin, L. (2010). Thirty Years of Spatial Econometrics. Regional Science, 89(1), 3–25
-       Baltagi B.H., & Michael P.E. (2007). Estimating models of complex FDI: Are there third-country effects? Journal of Econometrics, 140, 260–281.
-       Baltagi B.H. (1981). Simultaneous Equations with Error Components. Journal of Econometrics, 17(2), 189–200.
-       Baltagi B.H (2008). Econometric Analysis of Panel Data. 4th edition. John Wiley & Sons.
-       Cologne, A. & Manera, M. (2009). The Asymmetric Effects Oil Shocks on Output Growth: A Markov-Switching Analysis for the G-7 Countries. Economic Modeling, 26, 1-29.
-       Deardorff, A. (1998). Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World? Edited by Frankel, J. A. The Regionalization of the World Economy, 7-32. Massachusetts: National Bureau of Economic Research.
-       Delavari, M., Shirin-Sahsand, S. & Dasht-e-Bozorghi, Z. (2008). Investigating the Impact of Oil Prices on Iran's Economic Growth Using Asymmetric Convergence. Journal of Energy Studies, 5(18). 80-65 (In Persian).
-       Demailly, D. & Quirion, P. (2008). European Emission Trading Scheme and Competitiveness: a Case Study on the Iron and Steel Industry. Energy Economics, 30 (4), 2009–2027.
-       Egger, P., & Pfaffermayr, M. (2004). Distance, Trade and FDI: a Housman–Taylor SUR Approach. Journal of Applied Econometrics, 19, 227–246.
-       Elhorst, J.P. (2003). Specification and Estimation of Spatial Panel Data Models. International Regional Science Review, 26(3), 244-268.
-       Hadian, I. & Parsa, H. (2006). Investigating Fluctuations in Oil Prices on Macroeconomic Performance in Iran. Journal of Humanities and Social Sciences (Special Economics), 6(23), 32-1 (In Persian).
-       Hanna, R. (2010). US Environmental Regulation and FDI: Evidence From a Ppanel of US-Based Multinational Firms. Journal of Appllied Economics, 2, 158–189.
-       Harati, J., Behrad Amin, M. & Gahzareh, S. (2015). Investigation of Main Determinants of Iranian Exports (Application of Gravity Model). Quarterly Journal of Economic Growth and Development Research, 6(21), 29-46 (In Persian).
-       Inmaculada C., Alvarez, J. & Barbero. A. (2017). A Panel Data Toolbox for MATLAB. Journal of Statistical Software, 76(6), 1-27
-       Jamshidnejad, F., Taleghani, S. & Jalaei Esfandabadi, A. (2014). The Space Science Econometrics: Theory and Techniques in MATLAB Software. Publisher Noor ELm, Hamedan (In Persian).
-       Levinson, A., & Taylor, M., (2008). Unmasking the Pollution Haven Effect. International Economic Review, 49(1), 223-254.
-       Mehregan, N., Haghani, M. & Keramatfar, M. (2012). Is the increase in energy prices a serious threat to the industrial exports? Quarterly Journal of Economic Research and Policies, 20(62), 79-94 (in Persian).
-       Mendoza, O. & Vera, D. (2010). The Asymmetric Effect of Oil Shocks on an Oil-Exporting  Economy. Cuadernos De Economia, 47, 3-13.
-       Mory, J.F. (1993). Oil Price and Economic Activity: Is the Relation Symmetric. Energy Journal, 14(4), 151-161.
-       Porter, M.E. & Van Der Linde, C. (1995). Toward a New Conception of the Environment Competitiveness Relationship. Journal of Economic Prospectives, 9 (4), 97–118.
-       Ron, C., Manderson, E. & Zhang, F. (2017), Energy Prices and International Trade: Incorporating Input-Output Linkages. Policy Research Working Paper, No.8076: 1-25.
-       Santos Silva, J.M.C., & Tenreyro, S. (2006). The log of gravity. The Review of Economics and Statistics, 88 (4), 641–658.
-       Sato, M., Dechezleprêtre, A. (2015), Asymmetric Industrial Energy Prices and International Trade. Energy Economics, 52(1), 130-141.
-       Sheng, Y., Wu, Y., Shi, X. & Zhang, D. (2015). Energy Trade Efficiency and Its Determinants: A Malmquist Index Approach. Energy Economics, 50, 306-314.
-       Souri, A. R. (2014), Analysis of the Factors Affecting Iran's Business Convergence with Selected Regional Blocks (Application of a Gravity Model). Quarterly Journal of Economic Research, 14(53), 37-63 (In Persian).
-       Taylor, M.S., & Copeland, B.R., (2004). Trade, Growth, and the Environment. Journal of Economic Literature, 42(1), 71-79.
-       Tousi, R. (2005). A look at the impact of how oil prices rise to world economics and politics. Journal of Faculty of Law and Political Science, 67, 75-53 (In Persian).
-       Yazdani, M. & Pirpour, H. (2017). Determinants of Intra Industry Trade between Energy Sector of Iran and Main Trade Partners. Journal of Economic Modeling Research, 8(30), 43-78 (In Persian).
-       Yazdani, M., Sadeghi, M. & Ramezani, H. (2017). Border Effects in Bilateral Trade between Iran and Main Trade Partners: Non-Linear Gravity Model. Journal of Economic Research, 52(1), 245-269 (In Persian).