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Evaluating the effect of intra-industry trade on the bilateral trade productivity for petroleum products of Iran

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  • Yazdani, Mehdi
  • Pirpour, Hamed

Abstract

The rapid growth of energy consumption and the unequal distribution of energy resources have increased the concern for sustainable development in the face of deteriorating energy security. However, institutional arrangements associated with the energy market and market integration can improve the distribution of energy products and boost bilateral trade productivity in energy products. Furthermore, intra-industry trade (IIT) can increase the level of market integration among trading partners through expanding vertical relationships among them. Thus, the aim of this study is to evaluate the effect of IIT on bilateral trade productivity. Hence, this study tries to identify the determinants of bilateral trade flows of crude oil and petroleum products among Iran and its major partners using the Poisson pseudo-maximum-likelihood (PPML) method during 1997–2016. Then, the bilateral trade productivity of the selected products will be calculated using the Malmquist index. Finally, the effect of IIT on the bilateral trade productivity among Iran and its partners will be evaluated using panel data method. Based on the results, the gross domestic product (GDP) per capita, the difference of oil reserves, the access to sea, and the IIT have positive effects on the bilateral trade flows, while the effects of transportation costs and economic sanctions are negative. Also, the impact of IIT on the bilateral trade productivity is positive.

Suggested Citation

  • Yazdani, Mehdi & Pirpour, Hamed, 2020. "Evaluating the effect of intra-industry trade on the bilateral trade productivity for petroleum products of Iran," Energy Economics, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:eneeco:v:86:y:2020:i:c:s0140988318300823
    DOI: 10.1016/j.eneco.2018.03.003
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    Cited by:

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    2. Jenny P. Danna-Buitrago & Rémi Stellian, 2022. "A New Class of Revealed Comparative Advantage Indexes," Open Economies Review, Springer, vol. 33(3), pages 477-503, July.
    3. Ismat Nasim & Mohamed Boukhris & Umar Nawaz Kayani & Farrukh Bashir & Syed Arslan Haider, 2023. "Exploring the Links between Renewable Energy, FDI, Environmental Degradation, and International Trade in Selected Developing Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 418-429, November.
    4. Fatemeh Rahimzadeh & Hamed Pirpour & Bahman P. Ebrahimi, 2022. "The impact of economic sanctions on the efficiency of bilateral energy exports: the case of Iran," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.

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    More about this item

    Keywords

    IIT; Bilateral trade productivity; Crude oil and petroleum products; PPML; Malmquist index;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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