Exchange Rate Pass-through in Iranian Pistachio Export Markets: A Panel Data Approach

Exchange rate pass-through is a subject that has been discussed and analyzed due to its impacts on trade balance and export prices. The main purpose of this paper is to investigate empirically the relationship between exchange rate and Iran''s pistachio export prices. Using a panel of data from twenty-three destination markets over the period 1992–2010، fixed effects regression model is used to test this relationship. The results of model estimation with a common exchange rate coefficient for all destination markets indicate that Iranian exporters absorb a portion of change in the exchange rate and so pass-through to export prices is incomplete. Another result from this study is that competitive condition is not prevailed in destination markets. According to the pattern of demand in destination markets and high degree of exchange rate pass-through for pistachio، it is concluded that Iranian exporters should focus on non-price competition for increasing market share.