Analysis of Trade Integration Between Iran & Turkey

اقتصاد و توسعه منطقه ای

Article 3, Volume 18, Issue 1, June 2011   

Document Type: Research article

DOI: 10.22067/erd.v18i1.13676

Authors

Alireza Shakibaee^* ; Fatemeh Kobra Bata; Somayeh Heydarabadi

Abstract

Abstract
This paper after studying popularized and economic condition in Iran and Turkey, investigates economic integration trade result of the two countries together and with South West Asia region. in fact the main purpose of this paper is to investigate the trade potential and Its effects on increasing bilateral trade between Iran and Turkey.This paper aims to answer this question:
Could trade cooperation between Iran and Turkey and also with other members of South West Asia region lead to the increase of bilateral trade?
In order to answer this question, Generalized Gravity Model was used and it was estimated with Panel Data method. The results indicate that per capital income and geographical distance between them greatly justify economic cooperation between Iran and Turkey. This can lead to an increase in bilateral trade cooperation between two countries. The results also showed that two countries can not have integration with other South West Asia countries.

JEL Classification: F15, F36.

Keywords: Trade integration, Bilateral trade, Generalized Gravity Model, Panel Data.

Keywords

Trade integration; Bilateral trade; Generalized Gravity Model; Panel Data