The Effect of Foreign Direct Investment, Real Exchange Rate and Economic Liberalization on non – Oil Exporting in I.R.Iran(Using Toda Yamamoto Causality Test)

Document Type : Research Paper


1 Associate Proffesor, faculty of Economics, Islumic Azad University of Shiraz

2 PH.D. Student of Economics, faculty of Economics, Islumic Azad University of Shiraz

3 Internal Business Expert of Industry, Mine and Trade Organization, Jahrom Office,


The economy's dependence on oil revenues and derivatives of these products make the country's economy heavily influenced by the volatility and instability of the pricing of these products. Therefore, it seems necessary to develop non-oil exports. This paper examines the causality relation and the effect of foreign direct investment, economic openness and real exchange rate on non-oil exporting in I.R.Iran. Using annual data covering the period 1974-2008, vector auto regressive method and Toda- Yamamoto causality test it is shown that significant and positive effect exist between openness of economy, foreign direct investment, and real exchange rate on non- oil export variable. More over the existence of a single causality relation from real exchange rate and economic openness to non–oil exporting has been proved.
 JEL: F19, F21, F31, F41


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