Risk analysis and diversification of Iran's non-oil export basket using nonparametric method and semiparametric

In this study, using portfolio theory and the risk content of exports models and risk- weighted comparative advantage (RiskCA), the risk and diversification of Iran's non-oil export portfolio are analyzed. In fact, each of the export commodity sectors is considered as an asset and its variation in the export structure are calculated as the content risk of exports. In this regard, using export data during the period 1988-2019, the diversification index of Iran's non-oil exports has been measured based on the overall difference measures. Also, the risk- weighted comparative advantage is calculated and its relationship with the risk content of exports and export diversification index using nonparametric estimation and semi-parametric and analyzed by Matlab programming. According to the results of this research, the relationship between the degree of export diversification and the risk of the risk- weighted comparative advantage (RiskCA) is U-shaped. This means that if there is a comparative advantage in the safe export sectors of the country, it will choose fully specialized. Exports will specialize in high-risk sectors if the comparative advantage is strong enough. However, in intermediate values of comparative advantage, the export will diversify between risky and risk-free sectors and an optimal combination solution is selected.