The Impact of Institutional Factors on Domestic Trade in Iran

In modern societies, there is no doubt about the importance of the role of governments in economic systems. In any economic system, the state and the market regulate and guide the economic processes. Other than these, there is another important element involved, namely institutional context. In fact, institutional context is an intermediate link between the state and the market to mediate their interactions. Institutional context determines the boundaries of the state and the market. The aim of this study is to investigate the impacts of political, economic and social institutions on the volume of domestic trade in Iran. To achieve this goal, the XLSTAT PLS software was used to prioritize political, economic and social institutions on the domestic trade volume of our economy. The results indicated that political, social and economic institutions have the greatest effects on the volume of the domestic trade. According to the results of the model, the indices of economic, social and political institutions respectively at the rate of 0.42, 0.379 and - 0.435 percent are suggestive of their significant effects on the volume of the domestic trade. Due to the negative effect of political institutions in this case, it is proposed that the development of e-government policies to control corruption as well as the transparency of activities in line with policy makers to improve the institutional indicators be taken into consideration.