Comparison of the Effects of Institutional Factors on Trade Growth in Islamic Countries with Emphasis on Iran

One of the controversial issues in the economic growth literature is the effect of the growth of international trade, with an emphasis on institutional factors. In this research, the effect of institutional factors and the degree of trade openness on economic growth of OIC member countries using the convergence-growth equation and system estimation of generalized moments of dynamic panel data during the 1995- 2015 period is tested. Due to the expertise of most of these countries, in the production and export of raw materials, we have used three variables of the degree of trade openness: intragroup trade, outsourcing and total trade (each of which is a percentage of net domestic production). The results of the calculations show that total trade, outsourcing, investment in physical capital, institutional and human factors are the drivers of economic growth in these countries. While intra-group trade, population growth and the expansion of the consumption body of governments have a deterrent effect on the economic growth of these countries. Another important consequence is that, in the present circumstances, the expansion of trade relations in the form of regional and trans-regional cooperation with the countries of the Organization of the Islamic Conference will not lead to Iran's economic growth and due to the direct relationship these variables with economic growth It can be argued that the abundance of natural resources, along with the weakness of institutional factors, has led to weakening the industry as an exchangeable sector and reducing industrial exports and, as a result, has slowed the economic growth of these countries. Therefore, it is possible to minimize the export of natural resources in raw materials and the share of revenues from the export of these resources in the country's budget, as well as to support non-oil sectors and establish institutions such as the postponing fund and the investment of income Oil has prevented Dutch disease from happening in these countries, and Finally, we can say that Islamic countries continue to suffer from curse of natural resources.