Application of Stochastic Frontier Gravity Model for Determining Seafood Export

The efficiency estimation of industry-specific exports plays a vital role in identifying export potentials and appropriate marketing strategies. This paper aimed to investigate the main determinants of Iran’s seafood exports to its 32 trading partners from 2001 to 2018, using the Stochastic Frontier Gravity (SFG) model. Moreover, this paper analyzed the efficiency and export potentials of Iran’s seafood to its trading partners. The findings confirmed the consistency of SFG for Iran’s seafood exports. The results indicated that the Gross Domestic Product (GDP) of Iran and its trading partners had significant positive effects. In contrast, the bilateral exchange rate, common border, common religion, distance, economic crisis, and sanctions had significant negative effects on Iran’s seafood exports. In addition, the results of export efficiency revealed that Iran has great export potential to its trading partners, particularly neighboring countries. People's awareness of the benefits of seafood in neighboring countries with low consumption can increase their demand and increase Iran's exports to them. Considering the high export potential in these countries with high religious and cultural similarities, it is suggested that Iran should strengthen its food trade relations with neighboring countries such as Iraq, Turkmenistan, Lebanon, Kuwait, the United Arab Emirates, and Afghanistan.