Estimating Trade Potential of Iran wiht Selected Countries

The present study aimed to determine the trade potential of Iran with 13 countries that have made up the largest volume of foreign trade in the last decade. For this purpose, we have utilized the generalized gravity model and multivariate regression technique with panel data is used to estimate it. The results show that the most important variables affecting the trading volume of Iran are gross domestic product per capita and population, and that geographical distance variable had insignificant impact. On the other hand, the most trade gap of Iran is attributed to Turkey and the United Kingdom and the minimum gap is related to Afghanistan.

Keywords:

economic integration , globalization , gravity model , panel data , trade gap