Evaluating the Dynamics of Iran's Food Exports in the Framework of the Product space theory

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According to the product space theory, the probability that a country will be able to develop the production and export of a product, depends on its current capabilities in producing other products, which are closely related to that product. In this research, based on the product space theory, the export dynamics of Iranian food industry has been investigated. For this purpose, the density index, which is an important variable of the product space approach, is used in an econometric model as an explanatory variable. Then, the system GMM estimator is applied to estimate the model. The results indicate that the coefficient of the density index is positive and is statistically significant at the level of 1%. Therefore, product space theory is a powerful approach to identify new products in the food industry, in order to develop the industry and to diversify the country's export basket. According to this study, the following new products were identified in this industry: (1) flour and meal, (2) jam, jelly and fruit, (3) confectionery sugar, (3) fruit and nuts, (4) fruit juice, (5) cane and beet sugar, and (6) other plant products. Finally, based on the core of the product space theory, it is recommended that network cooperation is formed among manufacturing companies active in this industry, for adopting new technologies to develop new products.