Investigation of the Factors Affecting Iran's Food Industry Exports: Application of Gravity Model

For a long time, the main feature of Iran's economy has been its dependence on oil revenues and a single-product economy. Developments in the 1990s in Western countries' policies against Iran and the imposed sanctions have made it increasingly necessary to pay attention to reducing dependence on oil revenues and developing non-oil exports. Meanwhile, the export of food industry products is one of the pillars of non-oil exports due to the existing potentials in the country and certain advantages such as higher added value and job creation. Therefore, this study aimed at investigating the factors affecting the export of Iran's food industry to the target countries using the panel data method and the gravity model during 2001-2018. The results showed that the variables of per capita income of the target countries and Iran, population of the target countries and Iran and export price index of Iran had positive effects and the variable of distance had a negative effect on the export value of Iran's food industry. The variable of real exchange rate also had a positive effect though not statistically significant on the export of Iran's food industry to the target countries. Finally, according to the study results on the development of target markets and focus on the countries of the region, given that these countries have high per capita incomes, it might be recommended to strengthen economic diplomacy and develop transport infrastructure to reduce transportation costs.