The Effect of Trade Integration on the Efficiency of Iran’s Gas Trade Using the Gravity Model

Document Type : Research Paper


Department of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University


Intra-industry trade (IIT) can raise trade integration among trading partners through expanding commodity circulation, reducing technology gap, and creating an economic scale. According to the role of trade integration in improving trade efficiency and the role of IIT in expanding trade integration, the aim of this study is to evaluate the effect of IIT indices as proxies for trade integration on the bilateral trade efficiency of neutral gas and other hydrocarbon gases among Iran and its major partners. Hence, this study tries to identify the determinants of bilateral trade flows of the selected products among Iran and its major partners using the Poisson pseudo-maximum-likelihood method during 1997-2016. Then, the bilateral trade efficiency of the selected products has been calculated using the Malmquist index. Finally, the effect of trade integration via IIT indices on the bilateral trade efficiency has been evaluated using the panel data method during 1998-2016. Based on the results, the GDP per capita, the difference of gas reserves, the common border, and the IIT indices have positive effects on the bilateral trade flows, while the coefficient of geographical distance is negative. The results also show that the relationship between the IIT indices and the bilateral trade efficiency is positive.
JEL Classification: C23, C67, F13, O47, Q43.


پیرپور، حامد (1395). یکپارچگی تجاریی و کارایی جریان تجارت انرژی بین ایران و شرکاء برتر تجاری در بخش انرژی: رویکرد شاخص مالم­کوئیست. پایان­نامه‌ی کارشناسی ارشد، گروه اقتصاد، دانشکده‌ی اقتصاد و علوم سیاسی، دانشگاه بهشتی.
جهانتیغی، محمدعلی، مقدس، زهره و واعظ ­قاسمی، محسن (1390). شاخص بهره‌وری مالم­کوئیست چند مرحله­ای. تحقیق در عملیات و کاربردهای آن، 8(4): 70-59.
رازینی، ابراهیم علی، شاهانی، فائقه و وجدانی طهرانی، هدیه (1390). بررسی پتانسیل تجاری میان ایران و کشورهای عضو شانگ‌های با استفاده از مدل جاذبه. پژوهش­نامه‌ی بازرگانی، 18(69): 112-83.
رازینی، ابراهیم علی، میرزایی­نژاد، محمد رضا و شیرین­زاده، معصومه (1394). بررسی پتانسیل تجاری میان ایران و کشورهای منتخب در منطقه (ترکیه، سوریه، بحرین، عمان، قطر، کویت، عربستان سعودی و امارات متحده‌ی عربی) با استفاده از مدل جاذبه. پژوهش­نامه‌ی بازرگانی، 20(77): 167-147.
راسخی، سعید (1386). روش­شناسی اندازه­گیری تجارت درون­صنعت: یک مطالعه‌ی موردی برای صنایع کارخانه­ای ایران. تحقیقات اقتصادی، 42(4): 244-221.
سعادت، رحمان و محسنی، ناهید (1392). بررسی هم­گرایی اقتصادی میان ایران و کشورهای حوزه دریای خزر (کاربرد مدل جاذبه). پژوهش­نامه‌ی بازرگانی، 19(73): 54-29.
لطفعلی­پور، محمد رضا، شاکری، سیده زهرا و بطا، فاطمه کبری (1390). بررسی هم گرایی اقتصادی میان ایران و کشورهای آمریکای لاتین (کاربرد مدل جاذبه). پژوهش‌های رشد و توسعه اقتصادی، 1(3): 98-73.
هراتی، جواد، بهراد امین، مهدی و کهرازه، ساناز (1393). بررسی عوامل مؤثر بر صادرات ایران (کاربرد مدل جاذبه). پژوهش‌های رشد و توسعه‌ی اقتصادی، 6(21): 46-29.
یزدانی، مهدی، رمضانی، هادی و صادقی، مینا (1395). اثرات مرزی در جریان تجاری گروه‌های کالایی ایران: کاربردی از تصریح غیرخطی. پژوهش‌نامه‌ی اقتصادی، 16(62): 188-159.
یزدانی، مهدی، صادقی، مینا و رمضانی، هادی (1396). اثرات مرزی در تجارت دوجانبه ایران و شرکای برتر تجاری: رویکرد الگوی جاذبه‌ی غیرخطی. تحقیقات اقتصادی، 52(1): 269-245.

Anderson, J. E. (1979). A Theoretical Foundation for the Gravity Equation. The American Economic Review, 69(1): 106-116.
Balassa, B. (1963). European Integration: Problems and Issues. American Economic Review, 53(2): 175-184.
Balassa, B. (1966). Tariff reductions and Trade in Manufactures among Industrial Countries. American Economic Review, 56(3): 466-473.
Balassa, B., & Bauwens, L. (1987). Intra-Industry Specialization in a Multi Country and Multi-Industry Framework. The Economic Journal, 97(388): 923-939.
Baltagi, B. H., Egger, P., & Pfaffermayr, M. (2003). A Generalized Design for Bilateral Trade Flow Models. Economics Letters, 80(3): 391-397.
Bergstrand, J. H. (1989). The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade. The Review of Economic and Statics, 71(1): 143-153.
Brulhart, M. (1994). Marginal Intra-Industry Trade: Measurement and Relevance for the Pattern of Industrial Adjustment. Weltwirtschaftliches Archiv, 130(3): 600-613.
Bougheas, S., Demetriades, P. O., & Morgenroth, E. L. (1999). Infrastructure, Transport Costs and Trade. International Economics, 47(1): 169-189.
Caves, D. W., Christensen, L. R., & Diwert, W. E. (1982). The Economic Theory of Index Numbers and Measurement of Input, Output and Productivity. Economica, 50(6): 1393-1414.
Chow, G. C. (1960). Tests of Equality between Sets of Coefficients in Two Linear Regressions. Econometrica, 28(3): 591-605.
Cleveland, C. J., Costanza, R., Hall, C. A. S., & Kaufann, R. K. (1984). Energy and the U.S. Economy: A Biophysical Perspective. Science, 225(4665): 890-897.
Dautovic, E., Orszaghova, L., & Schudel, W. (2014). Intra-Industry Trade between CESEE Countries and the EU15. European Central Bank Working Paper, 1719.
Deardorff, A. V. (1998). Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?. Edited by Frankel, J. A. The Regionalization of the World Economy, 7-32. Chicago: University of Chicago Press.
Drysdale, P., Huang, Y., & Kalirajan, K. P. (2000). China's Trade Efficiency Measurement and Determinants. Edited by Drysdale, P., Zhang, Y., & Song, L. APEC and Liberalisation of the Chinese Economy, 259-271. Canberra: Asia Pacific Press.
Ekanayake, E. M., Mukherjee, A., & Veeramacheneni, B. (2010). Trade Blocks and the Gravity Model: A Study of Economic Integration among Asian Developing Countries. Economic Integration, 25(4): 627-643.
Färe, R., Grosskopf, S., Lindgren, B., Roos, P. (1992). Productivity Changes in Swedish Pharmacies (1980-1989): A Non-Parametric Malmquist Approch. The Journal of Productivity Analysis, 3(1): 85-101.
Fontgné, L., Freudenberg, M., & Peridy, N. (1997). Trade Patterns inside the Single Market. CEPPII Working Paper, 1997-07.
Fontagné, L., Freudenberg, M., & Gaulier, G. (2005). Disentangling Horizontal and Vertical Intra-Industry Trade. CEPII Working Paper, 2005-10.
Greenaway, D., Hine, R., & Milner, C. (1995). Vertical and Horizontal Intra-Industry Trade: Across Industry Analysis for the United Kingdom. Economic Journal, 105(433): 1505-1518.
Greenaway, D., & Milner, C. (1983). On the Measurement of Intra-Industry Trade. Economic Journal, 93(372): 900-908.
Grubel, H. G., & Lioyd, P. J. (1975). Intra-Industry Trade: The Theory and Measurement of International Trade in Differentiated Products. Economic Journal, 85(339): 646-648.
Hausman, J. A. (1978). Specification Tests in Econometrics. Econometrica, 46(6): 1251-1271.
Head, K., & Mayer, T. (2002). Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade. CEPII Working Paper, 2002-01.
Helpman, E., & Krugman, P. R. (1985). Market Structure and Foreign Trade. Cambridge: MIT Press.
Jean, S., & Bureau, J. C. (2015). Do Regional Trade Agreements Really Boost Trade? Estimates for Agriculture Products. CEPII Working Paper, 2015-09.
Jensen, J. L. W. V. (1906). Sur Les Functions Convexes et Les Inegalites Entre Les Valeurs Moyennes. Acta Math, 30(1): 175-193 (French).
Kabir, M., & Salim, R. (2010). Can Gravity Model Explain BIMSTEC’s Trade?. Economic Integration, 25(1): 144-166.
Kang, H., & Fratianni, M. (2006). International Trade Efficiency, the Gravity Equation, and the Stochastic Frontier. Kelley School of Business Working Paper, 2006-08.
Kao, C. (1999). Spurious Regression and Residual-Based Tests for Cointegration in Panel Data. Econometrics, 90(1): 1-44.
Kawecka-Wyrzykowaska, E. (2010). Evolving Pattern of Intra-Industry Trade Specialization of the New Member States of the EU: The Case of the Automotive Industry. Edited by Keereman, F., & Szekely, I. Five Years of an Enlarged EU, 11-31. Berlin: Springer.
Kurihara, Y. (2011). The Impact of Regional Trade Agreements on International Trade. Modern Economy, 2(5): 846-849.
Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit Root Test in Panel Data: Asymptotic and Finite Sample Properties. Econometrics, 108(1): 1-24.
Limao, N., & Venables, A. J. (2001). Infrastructure Geographical Disadvantage, Transport Costs, and Trade. World Bank Economic Review, 15(3): 451-479.
Linder, S. B. (1961). An Essay on Trade and Transformation. New York: John Wiley and Sons.
Loertscher, R., & Wolter, F. (1980). Determinants of Intra-Industry Trade: Among Countries and Across Industries. Weltwirtschaftliches Archiv, 116(2): 280-293.
Malmquist, S. (1953). Index Number and Indifference Surfaces. Trabajos de Estatistica, 4: 209-242.
Manning, W. G., & Mulahy, J. (2001). Estimating Log Models: to Transform or Not to Transform? Health Economics, 20(4): 461-494.
Philipsen, N., Weishaar, S. E., & Xu, G. (2016). Market Integration: The EU Experience and Implications for Regulatory Reform in China. Berlin, Heidelberg: Springer.
Roperto, D. J., & Edgardo, C. (2014). Philippine Export Efficiency and Potential: An Application of Stochastic Frontier Gravity Model. World Journal of Economic and Finance, 1(2): 005-015.
Ruffin, R. J. (1999). The Nature and Significance of Intra-Industry Trade. Economic and Financial Review, Federal Reserve Bank of Dallas, Fourth Quarter, 2-9.
Sandberg, H. M., James, L., Seale, J. R., & Taylor, T. G. (2006). History, Regionalism, and Caricom Trade: A Gravity Model Analysis. Development Studies, 42(5): 795-811.
Sheng, Y., & Shi, X. (2011). Energy Market Integration and Economic Convergence: Implications for East Asia. Edited by Kimura, F., & Shi, X. Deepen Understanding and Move Forward: Energy Market Integration in East Asia, 96-122. Jakarta: Economic Research Institute for ASEAN and East Asia (ERIA).
Sheng, Y., Shi, X., & Zhang, D. (2013). Economic Development, Energy Market Integration and Energy Demand: Implications for East Asia. Energy Strategy Reviews, 2(2): 146-152.
Sheng, Y., Wu, Y., Shi, X., & Zhang, D. (2015). Energy Trade Efficiency and its Determinants: A Malmquist Index Approach. Energy Economics, 50: 306-314.
Shi, X., & Kimura, F. (2014). The Status and Prospects of Energy Market Integration in East Asia. Edited by Wu, Y., Kimura, F., & Shi, X. Energy Market Integration in East Asia: Deepen Understanding and Move Forward, 9-24. New York: Rutledge.
Shi, X., & Widodo, T. (2014). Benefits of ASEAN Energy Market Integration: A Survey of the literature. AEMI Working Paper, 2014-10.
Silva, J. M. C. S., & Tenreyro, S. (2006). The Log of Gravity. Review of Economics and Statistics, 88(4): 641-658.
Tinbergen, J. (1962). Shaping the World Economy: Suggestions for an International Economic Policy. New York: Twentieth Century Fund.
U.S. Energy Information Administration (2016). International Energy Outlook 2016. Washington, D. C: U.S. Energy Information Administration.
Verdoorn, P. (1960). The Intra-Industry Trade of Benelux. Edited by Robinson, E. A. G. The Economic Consequences of the Size of Nations, 291-329. New York: Macmillan.
Vollrath, T. L. (1991). A Theoretical Evaluation of Alternative Trade Intensity Measures of Revealed Comparative Advantage. Weltwirtschaftliches Archiv, 130(2): 265-279.
Wald, A. (1943). Tests of Statistical Hypotheses Concerning Several Parameters When the Number of Observations is Large. Transactions of the American Mathematical Society, 54(3): 426-482.
Wooldridge, J. M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge: MIT Press.
Wu, Y., Kimura, F., & Shi, X. (2014). Energy Market Integration in East Asia: Deepen Understanding and Move Forward. Abingdon: Routledge.
Xing, Y. (2007). Foreign Direct Investment and China's Bilateral Intra-Industry Trade with Japan and the US. BOFIT Discussion Papers, 1/2007.
Yazdani, M., & Pirpour, H. (2018). Evaluating the Effect of Intra-Industry Trade on the Bilateral Trade Productivity for Petroleum Products of Iran. Energy Economics, DOI: 10.1016/j.eneco.2018.03.003.
Yoo, S. H. (2006). The Causal Relationship between Electricity Consumption and Economic Growth in the ASEAN Countries. Energy Policy. 34(18): 3573-3582.
Volume 53, Issue 4 - Serial Number 125
December 2018
Pages 989-1018
  • Receive Date: 22 November 2016
  • Revise Date: 19 March 2018
  • Accept Date: 08 May 2018
  • First Publish Date: 22 December 2018