Examining the effect of the total productivity of production factors on export diversity with emphasis on the objectives of the general policies of the system

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Document Type : Research/Original/Regular Article

Authors

1 Ph.D Candidate in Economic, Faculty of Economics and Accounting, Razi University, Kermanshah , Iran.

2 Associate professor, department of economic, Faculty of economic and Accounting, Razi University, Kermanshah, Iran

3 Associate professor, department of economic, faculty of economic and Accounting, Kermanshah, Iran.

10.30507/jmsp.2024.431456.2675

Abstract

One of the most important goals of the system's general policies is to achieve a stable foreign exchange income through export diversification and focusing on the endogenous forces of the economy with improvement in productivity. Therefore, export diversification determines the stability of the country's foreign exchange income and is a function of the productivity of production factors and the size of the domestic market as drivers of increasing competitiveness that can meet the goals of the general policies of the system. in this regard, this paper using statistical evidence of industrial sub-sectors over 2002-2020 and using the panel data approach It examines the effect of the total productivity of production factors and the size of the domestic market on export diversity. the evidence shows that the export diversity is the highest in the food industry sector and the lowest in mineral products, the estimates show that the size of the domestic market has a positive and significant effect on export diversification and the total factor of productivity has a negative effect on export diversification and improving the productivity of total production factors in sectors with a larger domestic market size has led to a decrease in export diversification, which indicates the absence of a strong relationship between industrial sub-sectors for spillover effects knowledge and skill among them, besides this, the industrial sector is not able to provide the input needs of the industrial sub-sectors, which indicates the lack of endogenous development of the industry in Iran's economy.

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