Iran’s Industrial Growth and Its Impact on Export Sophistication

The purpose of this study is to investigate the relationship between export sophistication and Iran’s industrial growth. To this end, export sophistication and other growth control variables such as real exchange rate, capital formation index and Number of employees with university education were also separated with data up to 2-digit level of ISIC Rev3 over the period 2016–2004. The results of panel estimation model using Generalized Least Squares (EGLS) and Fully Modified Least Squares (FMOLS) show positive and significant effect of export sophistication variable on Iran’s industrial growth. It is suggested that incentives and supportive policies be formulated and implemented to achieve high industrial growth, leading to a gradual change in the structure of industrial production so that activities with more sophisticated products replace the activities of low export sophistication.