Analyzing Pipe Production and Export: A Case Study of Ahvaz Pipe Mills Company

Pipe is one of the main tools for transforming gas, oil and oil commodities in oil industry. For this reason pipe production, import and export are of greate importance. The main pipe producer in Iran is Ahvaz pipe Mills Company. Therefore, the main pipe production function has been estimated during 1979-2002 using Engle-Granger co-integration method and error correction model. The findings of the research show that the Cobb-Douglas mode fits data better than other models. The speed of error correction of the model equals -0.96. The elasticity of labour is 0.58 and that of capital is 0.53 which indicate increasing returns to scale. The findings also show that regarding the current production and domestic demand, pipe export strategy cannot be the main priority of the company in short term. But in long term, when the domestic consumption is fulfilled, pipe export to neighbor countries based on consumer-oriented approach can be considered as one of the main priority of the company.