Assessing effective factors for export of Iranian dates to European Union using a gravity model

Mohammad Ghorbani, Suren Kulshreshta and Milad Aminizadeh

Abstract: Agricultural sector is the most influential sector in developing countries, such as Iran. This is on account of favorable climatic conditions and availability of natural resources, which lead to high productive capability and excess production for export of many agricultural products. Date is one of the most important agricultural export products in Iran. Recently, with the advent of exporting power of Iran, its position in the European Union (EU) market has diminished. Reasons for this are somewhat obscure and need further study. The aim of this study is to assess the role played by various factors on Iranian exports of dates to EU market. Analysis was based on an application of gravity model using data for the 2004-13 periods. Our analysis established four important results: First, Poisson Pseudo-Maximum Likelihood (PPML) estimator had more consistent results in comparison with the Least Square Dummy Variable (LSDV) estimator in assessing factors governing exports of Iranian date to EU. Second, Traditional variables such as GDP per capita, credit, openness had significantly positive impact, while distance and landlocked had a significantly negative impact on export of Iran’s date. Third, economic crisis has a significantly negative impact on export of Iranian date to the EU. Fourth, EU’s re-exporters also had a significantly positive impact on these exports, which perhaps could become a serious threat to Iran in global markets in the long term.

Keywords: Dates; European Union; Gravity model; LSDV Estimator; PPML Estimator

Date published: 2021-02-25