Trade Potential for the Countries of the South West Asia Region Block

اقتصاد پولی مالی

Article 7, Volume 17, Issue 31, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i31.27256

Authors

Alireza Shakibai^* ; Fatemeh Kobra Bata

Abstract

The main purpose of this paper is to investigate the trade potential and its effects on increasing bilateral trade between the South West Asia regions, countries. Therefor, this paper aims to answer this question that: Could trade cooperation the South West Asia region's countries led to increase bilateral trade? To answer this question, Generalized Gravity Model is used and it is estimated by Panel Data method. The results indicate that GDP and geographical distance as independent variables, justify economic cooperation between them, mostly. This can lead to an increase in bilateral trade cooperation between these countries. The results show that the trade potential of the Iranian economy and the integration to the other members of the South West Asia region countries as a 61 percent in trade and also increase the value of bilateral trade flows between these countries.

Keywords

Trade potential; Bilateral trade; South West Asia; Generalized Gravity Model