Estimating the substitution elasticities of import of factory industries using micro data and comparing long-term and short-term elasticities.

Document Type : Original Article

Authors

1 Assistant Professor in Economics, Shahid Beheshti University, Tehran, Iran.

2 PhD Student of Economics, Shahid Beheshti University, Tehran, Iran.

Abstract

Estimating the substitution elasticity of imported products is a key parameter for analyzing trade policies, especially trade integration issues. In general, this elasticity represents the intensity of the impact of import demand on domestic demand from the relative change in domestic price to import. In this study, the Armington substitution elasticity's were estimated for 103 industries four-digit ISIC in the period 1371-1396.
The data used for domestic manufacturing production are extracted from the Statistical Center of Iran, the domestic and import price indices at the producer level from the Central Bank of Iran, and the trade data from the Islamic Republic of Iran Customs Administration.
According to the results; the industries with the highest positive elasticities of substitution, respectively, are the "Manufacture of malt liquors and malt" and the "Manufacture of basic chemicals, except fertilizers and nitrogen Compounds" and Industries with the lowest positive substitution elasticity are, respectively "Tanning and dressing of leather" and "Building and repairing of pleasure and sporting boats except ships". Accordingly, in industries with positive substitution elasticity, it is possible to replace foreign consumption with domestically produced goods. Long-term elasticities are also significantly higher than short-term tensions (6.7 times).

Keywords

References

بختیاری، صادق و سالم، بهنام (1387). «اثرات آزادسازی تجاری بر تجارت محصولات زیربخش‌های صنعتی ایران». مجله پژوهشنامه اقتصادی، سال هشتم، شماره 31: 28–15.
پناهی، حسین؛ سجودی، سکینه و مرندیان حق، مه‌نساء (1395). «برآورد کشش‌های قیمتی و درآمدی تقاضای واردات دارو در ایران». تحقیقات اقتصادی، دوره پتجاه‌ویکم، شماره‌ 4: 800-777.
پورتال بانک مرکزی جمهوری اسلامی ایران.
پورتال گمرک جمهوری اسلامی ایران، سالنامه بازرگانی خارجی، سال‌های مختلف.
پورتال مرکز آمار ایران.
شعبان‌زاده، مهدی؛ محمودی، ابوالفضل، اسفنجاری کناری، رضا (1394). «بررسی اثر انتقال قیمت‌های جهانی به بازارهای داخلی برای محصولات خاص بخش کشاورزی ایران». اقتصاد و توسعه کشاورزی، جلد 29، شماره 1: 67-55.
کفایی، سید محمدعلی و میری، ندا (1390). «تخمین کشش‌های جانشینی آرمینگتون برای کالاهای منتخب». پژوهش‌های اقتصادی (رشد و توسعه پایدار)، سال یازدهم، شماره 3: 46-27.
لیانی، قاسم؛ قربانیان، عفت و بخشوده، محمد (1394). «بررسی چگونگی انتقال قیمت جهانی غلات به بازارهای داخلی این محصولات در ایران: کاربرد کشش جانشینی آرمینگتون و کشش ارزی». اقتصاد و توسعه کشاورزی، جلد 29، شماره 4: 344–334.
یوسفی متقاعد، هانیه و مقدسی، رضا (1392. «بررسی انتقال قیمت‌های جهانی به بازار داخلی برخی از محصولات کشاورزی (گندم، جو و برنج)، کاربرد روش حداکثرسازی آنتروپی». تحقیقات اقتصاد کشاورزی، جلد 5، شماره 1:99-81.
 
Armington, Paul S. (1979) A Theory of Demand for Products Distinguished by Place of Production. IMF Staff Papers, Vol. 16, No. 1: 159-178
Bergstrand, Jeffrey; Larch, Mario and Yotov, Yoto (2015). Economic integration agreements, border effects, and distance elasticities in the gravity equation. European Economic Review, Vol. 78, issue C: 307-327
Broda, C., & Weinstein, D.E. (2006). Globalization and the gains from variety. Quarterly Journal of Economics, 121(2): 541-585.
Chen, Natalie and Novy, Dennis (2011). Gravity, trade integration, and heterogeneity across industries. Journal of International Economics 85: 206-221
Cheng, H. S. (1959). Statistical Estimates of Elasticities and Propensities in International Trade. IMF Staff Papers 7(1): 58-107.
Feenstra, Robert C.; Luck, Philip; Obstfeld, Maurice, & Russ, Katheryn (2014). In Search of the Armington Elasticity. Working Paper.
Ghodsi, M.; Grübler, J., & Stehrer, R. (2016). Import demand elasticities revisited. Vienna Institute for International Economic Studies.
Ghodsi, Mehdi and Stehrer, Robert (2019). Non-Tariff Measures NTMs in the Presence of Global Value Chains. The Vienna Institute for International Economic Studies (WIIW).
Goldstein, Morris and Mohsin S. Khan (1985). Income and Price effects in Foreign Trade. In Ronald W. Jones and Peter B. Kenen, eds., Handbook of International Economics, Vol. 2. Amsterdam: North-Holland.
Helpman, E. (1984). A simple theory of international trade with multinational corporations. The Journal of Political Economy, Vol.92 No. 3: 451-471.
Helpman, Elhanan and Paul R. Krugman (1985). Market Structure and Foreign Trade. Cambridge: MIT Press.
Imbs, J., & Méjean, I. (2009). Elasticity optimism. CEPR Discussion Paper 7177.
Imbs, Jean and Isabelle Méjean (2013). Elasticity Optimism. Manuscript, HEC Lausanne.
Imbs, Jean and Isabelle Méjean. (2016). Trade elasticity's. Review of International Economics, 21(X), 00-00, DOI: 10.1111/roie.12270
Kapuscinski Cezary A., and Peter G. Warr (2004). Estimation of Armington Elasticities: An Application to the Philippines. Department of Economics, Research School of Pacific and Asian Studies, Australian National University.
Leamer, Edward E. and Robert M. Stern (1970). Quantitative International Economics. Boston: Allyn and Bacon.
Magee, Stephen P. (1975). Prices, Incomes, and Foreign Trade. In Peter B. Kenen, ed., International Trade and Finance: Frontiers for Research. New York: Cambridge University Press.
Marquez, Jaime (2002). Estimating Trade Elasticities. Boston: Kluwer Academic Publishers.
Orcutt, Guy H. (1950). Measurement of elasticities in international trade. Review of Economics and Statistics 32(2): 117-132.
Redding, Stephen and Anthony J. Venables (2000). Economic Geography and International Inequality. Center for Economic Policy Research, Discussion paper No. 2568.
Shiells, Clinton R.; Robert M. Stern and Alan V. Deardorff (1986). Estimates of the elasticities of substitution between imports and home goods for the United States. Weltwirtschaftliches-Archive, Vol. 122, No. 3: 497-519.
Stern, Robert M.; Jonathan Francis and Bruce Schumacher (1976). Price Elasticitities in International Trade: An Annotated Bibliography. London: Macmillan Press.
Program and Development Research
Volume 1, Issue 4
November 2021
Pages 153-184

Files

Share

How to cite

Statistics