The Impact of Import and Export of Low Technology Industries on Iran Economic Growth

In the process of economic globalization, one of the important factors is transfer and technology overflow from the channel of trade. Absorbing foreign technology by the channel of imports of industrial products and using the latent technology in those products creates export development, increase the quality and quantity of manufactured goods with low costs, and modify management, technology improvements and production of goods with high added valu that this makes optimal allocation of resources, efficiency and economic growth in various economic sectors. Therefore, in developing countries, after passing through the agricultural sector, the technology has been absorbed into the low-tech industries to reach a stage of development and to create the appropriate substrates for producing higher value added industries. On the other hand, export of these industries is important by creating competitive advantage, improving management practices, making cost savings and valuing. In this study, using Romer’s endogenous growth model, the impact of import and export of low technology industries have been studied on economic growth of Iran for the period 2002-2012. In this regard, seasonal data were used in an autoregressive distributed lag (ARDL) model to examine the relationship between variables. The separation of low technology industries has been made according to the OECD classification. The results showed a positive and significant impact of import and export of low technology industries on Iran’s economic growth. Also other variables i.e. capital stock, employment and research and development expenditures have had a positive and significant effects on Iran economic growth.