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Trade Openness and Spatial Distribution of Manufacturing Industries: Iranian Provincial Evidence

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  • Ardeshiri, Mansour
  • Moghaddasi, Reza
  • Yazdani, Saeed
  • Mohamadinejad, Amir

Abstract

This paper aims to study the impact of trade openness on the spatial concentration of economic activities of manufacturing industries within the framework of New Economic Geography (NEG) theory. A three-step approach was used for testing the research hypothesis. The stationary test results of variables, in the first step, indicated that the variables are I (1). The results of the Pedroni panel cointegration test specified a long-run relationship between variables. In the third step, using GMM and fixed effects methods, the specified model was estimated for 28 provinces of Iran from 2004 - 2013. The findings show that trade openness has a negative and significant effect on the geographical distribution of manufacturing industries in the provinces of Iran. Indeed, the export promotion policies since the 1990s have led to the dispersion of manufacturing industries in the Iran provinces.

Suggested Citation

  • Ardeshiri, Mansour & Moghaddasi, Reza & Yazdani, Saeed & Mohamadinejad, Amir, . "Trade Openness and Spatial Distribution of Manufacturing Industries: Iranian Provincial Evidence," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 26(1).
    • Handle: RePEc:ags:thkase:338428
    DOI: 10.22004/ag.econ.338428
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    More about this item

    Keywords

    International Development;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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