Analysis of the Effect of Iran's Ranking Change in the Legatum Prosperity Index on Export of Iranian Agricultural Machines and Equipment

Strengthening of export capacity and active presence in global markets is one of the most important and effective factor regarding continuation of economic growth. Considering that the legatum prosperity index is a measure of the competitiveness of countries in the global economy, so the present study was conducted to analysis of the effect of Iran's ranking change in the legatum prosperity index on export of Iranian agricultural machines and equipment. For this purpose, the necessary data about to export of Iranian agricultural machinery and equipment to 14 major trading partner countries along with other required information was collected during the time period of 2016-20. According to the latest ranking of legatum institute in 2020, Iran’s rank in terms of legatum prosperity index is 120 out of 167 countries. The results of estimating the gravity model showed that the decline of Iran’s rank in the legatum prosperity index has the most negative effect and Iran's membership in trade agreements with other countries (1.56) has most positive effect on export rate of Iranian agricultural machinery and equipment’s. Partners GDP (0.72) and real exchange rate (0.22) has a positive effect and per-capita GDP of partner countries (-1.79) and the geographical distance (-0.65) has a negative effect on Iran's exports. According to the results it is suggested that in order to exports increase and achieving to sustainable economic growth, the necessary measures and policies should be designed and implemented to improve Iran's position in various sub-indicators of the legatum prosperity index especially economical sub-indicators.