Investigating the effect of specialization of saffron importing countries on Iran's exports

Agriculture plays a pivotal role in Iran’s economy by increasing production, exports, and employment and supplying food needs. Therefore, according to the country’s strategic goals to develop non-oil exports, saffron has been paid attention as one of the most important agricultural products due to its high income and currency earnings. However, the exports of this product to target markets have been reduced in recent years. On the other hand, the complexities of the global trade network have led the countries operating in this network to increase their specialization. Import specialization improves the supply chain to provide the food needs of importing countries, which play a key role in trade. Therefore, this study aims to evaluate the specialization pattern of saffron importing countries and analyse its impact on Iran’s exports using the Poisson pseudo-maximum likelihood method over 2001-2017. According to the results, the coefficient of the variable relative import advantage (RMA), as a proxy of import specialization, is positive and significant, thus having a significant effect on Iranian saffron exports. In addition, per capita GDP and population affect Iran’s saffron exports positively and significantly, while the coefficients of geographical distance and food crisis are negative and statistically significant. Therefore, due to the increasing specialization of saffron-importing countries and its significant effect on Iran’s exports, exporters are suggested to focus on close target markets with high per capita income and a high degree of specialization.