An Assessment of Iran's Agricultural Export by Use of Trade Conformity Index (TCI)

The augmented gravity model was employed to determine Iran's trading model and agricultural export directions in the case of cross section analysis in 2005 for 64 countries which are considered as Iran's main export market. Besides, another explanatory variable named Trade Conformity Index (TCI) was added to the model. This index was employed to identify Iran's trading model. Also, the role of this index in the impact of export premium on export was analyzed. Accordingly, the countries in question were separated into developing vs. developed ones. The results indicated that Iran's agricultural export was directed towards complementary oriented countries and Iran's trading model followed Heckscher-Ohlins. Also, the results implied that increasing export premium would decrease the impact of this index on agricultural export. So, increasing premium would improve agricultural export to competitive countries.