The effect of productivity shocks of Shanghai group countries on investment and employment in Iran's oil and gas sector with multi-region Computable General Equilibrium Model

Productivity of any country contact with share of that country of world trade directly. Also oil and gas have always been considered the most important commodity in the world. Given that Iran is among the main countries in the global energy business, it is important to be able to consider the influence of productivity of major trading partners of Iran in the energy sector. In this study the effect of productivity shocks of Shanghai group countries, as major energy-demanding groups, on the oil and gas sector is taken into consideration. On this basis, the original question of the paper is whether productivity shocks in the industry of Shanghai group countries have any effect on Iran's oil and gas sectors. To respond this question the computable general equilibrium approach for four economical sections (industry, oil and gas, agriculture, and services) and the social accounting matrix in 2004 and GTAP8 database have been adopted. The results indicate that if the trade of Iran with Shanghai group counties increases while productivity in the industry of Shanghai group countries increases 5%, it will cause an increase of investment and employment in the oil and gas sector in Iran.