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The Impact of Domestic Resource Cost on the Comparative Advantages of Iran Crude Steel Sector


  • Ismail, Abdul Ghafar
  • Gharleghi, Behrooz
  • Jafari, Yaghoob
  • Hosseinidoust, Ehsan
  • Shafighi, Najla


Steel is fundamental material for many industries that could produced by blast furnace (BF) and direct reduced Iron technology (DRI) .these two technologies differ from each other in term of difference of production cost, energy consumption, investment and environment issues. The purpose of this paper is to investigate comparative advantages of these two technologies by using domestic resource cost (DRC) method. It provides a comparison between the domestic costs to produce a specific good with its value added at international prices, which was done by Mckay (1999), DHEHIBI (2009), Ruiz (2003) and Bonjec (2002). The result suggests that that although both two technologies have its own comparative advantages, the blast furnace method (BF) would be more preferable than direct reduced Iron technology (DRI).

Suggested Citation

  • Ismail, Abdul Ghafar & Gharleghi, Behrooz & Jafari, Yaghoob & Hosseinidoust, Ehsan & Shafighi, Najla, 2009. "The Impact of Domestic Resource Cost on the Comparative Advantages of Iran Crude Steel Sector," MPRA Paper 26381, University Library of Munich, Germany, revised 25 Oct 2010.
  • Handle: RePEc:pra:mprapa:26381

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    References listed on IDEAS

    1. Bruno, Michael, 1972. "Domestic Resource Costs and Effective Protection: Clarification and Synthesis," Journal of Political Economy, University of Chicago Press, vol. 80(1), pages 16-33, Jan.-Feb..
    2. Warr, Peter G, 1983. "Domestic Resource Cost as an Investment Criterion," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 302-306, July.
    3. Bojnec, Stefan, 2002. "Agricultural and Food Competitiveness in Transition Central and Eastern European Countries: Social Profit Rate and Domestic Resource Cost Approaches," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 3(2), August.
    4. Cockburn, J. & Siggel, E. & Coulibaly, M. & Vezina, S., 1998. "Measuring Competitiveness and Its Sources: The Case of Mali's Manufacturing Sector," Equity and Growth through Economic Research 16, EAGER Publication/BHM.
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    More about this item


    Blast Furnace Technology; Direct Reduced Iron Technology; Crude Steel; Domestic Resource Cost; Shadow prices;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • D20 - Microeconomics - - Production and Organizations - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade


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