The investigation of affecting factors on Iran's medicinal plants export (Case study: Cumin)

The dependence of Iran's economy to oil revenues and affecting the political and economic issues on income have caused the vulnerability of the economy. One way to meet these challenges is expanding such products, on the one hand improving the domestic economy and on the other hand increasing the exports. Among the agricultural products, medicinal plants have a special role in the domestic economy and a great impact on the non-oil exports. According to the importance of non-oil exports in order to get rid of the single-product economy, the objective of this study is investigation of affecting factors on Iran’s cumin export over the period of 1986/2009. In this regard, the analysis of data has performed using the cointegration approach and Vector Error Correction Model (VECM). The model estimation results showed that the real exchange rate, agricultural value added and export price have a significant impact on cumin export. Furthermore, the results showed that there is a positive relationship between cumin export and real exchange rate. Therefore, taking the appropriate exchange rate policies in order to adjust the real exchange rate can play a substantial role in increasing production capacity and achieving to economic growth in future.