Study of Agricultural Trade Openness Impact on Export and Import Shares of Agriculture and Services in Iran

The objective of this study is to investigate the long run and short run interactions between agricultural trade liberalization and shares of the two sectors of agriculture and services in the total export and import products and services of Iran during the years 1961-2008. To figure out interactions, the vector correction model was used.The ratio of the sum of imports and exports to the GDP were considered as an index of trade openness. The Johansen test reveled that there are three long term relations among the variables of this study. Based on the findings, the higher the level of agricultural trade openness goes, the more the import shares of agriculture and service sectors in the long run are. Furthermore, agricultural trade liberalization has caused the exports of both agricultural products and services to decline in the short term.

Keywords:

Agricultural trade liberalization , Export , Import , Agriculture , Services , Iran