The Investigation and Estimation of Effective Factors on Iran's hand-Knotted carpet

In some last centuries, hand knotted carpet has been one of the main items of non- oil exports, and always have absorbed at least 20 percent of non- oil exports. In regard to carpet industry capacity in employment and non-oil exports, its expansion has considerable importance. Exports development needs a deep analysis of export process in three stages, production, export and demand. In production field, the care to production factors and having absolute and relative advantages in production of some goods is very important. In export field, factors such as marketing, packing, transportation, insurance should be considered and the suitable export policy regarding to any commodity characteristics should be taken. In demand field, price and income elasticities are considerable. In this research, first we review empirical studies in non- oil exports specially carpet production and export and then carpet exports from demand view will be analyzed. The major purpose of this research is investigation of carpet exports from demand view. By examining of export demand literature, suitable model of carpet export demand for period of 1350-1380 was determined Then, stationry and non- stationary tests of variables were implemented and model was estimated using OLS method (by Eviews package). This model specifies the effect of carpet price, importers income and exchange rate changes on carpet exports earnings. Estimated results show that carpet is a luxury and inelastic commodity. In other word, Carpet price rise will increase exports earnings, too. Moreover, by main considerations in carpet production, more luxury and high quality carpets in concentrated workshops should be knotted. On the other hand, nominal exchange rate incresase in regard to carpet inelastic being will decrease exports earnings.