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Evaluating the Geographical Position of Firm and its Impact on the Export Decision of Iranian Industrial Firms

Author

Listed:
  • Porebadollahan Covich, Mohsen

    (University of Tabriz)

  • Hemmati, Mojtaba

    (University of Tabriz)

Abstract

Geographical position of firm could have a significant effect on the export success of the firm, because of the economies of agglomeration. This study provides a model for export decision of Iranian industrial firms with emphasis on geographical position of firms. In this model, export decision of a firm is affected not only by firm characteristics but also by the geographical position of firm. To that end, using the firm level data of Iranian industrial firms at 2007, first the geographic-industrial concentration is calculated as an indicator of geographical position, and then the export decision of these firms is regressed on geographic-industrial concentration besides firm characteristic variables like labor productivity, firm size and human capital intensity. Empirical results show that export decision of the firm is not only affected by the firm characteristic variables, but also the location of firm (i.e. geographical position of firm) has also a significant effect on firm's export decision. That is, that exporting firms in a region that are involved in the same industry, reduce costs for other firms to enter foreign markets.

Suggested Citation

  • Porebadollahan Covich, Mohsen & Hemmati, Mojtaba, 2015. "Evaluating the Geographical Position of Firm and its Impact on the Export Decision of Iranian Industrial Firms," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 2(1), pages 121-142, April.
    • Handle: RePEc:ris:qjatoe:0007
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    More about this item

    Keywords

    Export Decision; Geographical Position; Firm Characteristics; Probit Model; Iran.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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