Abstract:
This paper is an empirical attempt to investigate bilateral trade flow between Iran and Russia. To this end, we used statistical analyses on macroeconomic series over the period of 1991-2017. Results revealed that there is a significant statistical difference in terms of exports between Iran and Russia, and that there has always been a buyer-seller dialogue between the two countries. According to the Export-Import Similarities (EIS), Iran and Russia represented low potential complementarity between the years 2001 and 2017, which indicated that there is more trade competitiveness rather than trade complementarities between the two countries. Results from the statistical tests of Friedman and Kruskal-W revealed that the service sector has played an important role in creating value in Russia’s economy. In addition, there is a statistical significant difference with respect to Iran’s exports to Russia in terms of Iran and Russia’s sanctions and Russia’s membership to WTO. During the sanctions imposed by the West, when Russia and Iran’s GDP always decreases, they find each other as regional allies and try to strengthen their bilateral economic relationship. However, there is an obviouslack of diversity in Russian and Iranian export supplies and the volume of bilateral trade between them is not expected to increase in the future. Russia and Iran have failed to establish adequate economic, technical and educational ties and there is no active economic diplomacy between them. As a result, developing a clear program for the promotion of bilateral trade is a strategic priority, which must be operationalized by politicians.
Machine summary:
According to the Export-Import Similarities (EIS), Iran and Russia represented low potential complementarity between the years 2001 and 2017, which indicated that there is more trade competitiveness rather than trade complementarities between the two countries.
Creating appropriate institutions, implementing certain policies such as membership in regional and intera-regional entities, officials’ diplomatic visits, sanctions, as well as market environment and the economic structure of the countries play an important role with regards to Russia’s trade potential and its implications.
This research aims to investigate the issue of bilateral trade and trade flow between Russia and Iran with an emphasis on Russia’s economic structure.
According to the data from the Russian Export Center (2019) and Iran-Russia Economic Database (2019), Iran was Russia’s 50th largest trading partner in 2018 (down from 48th in 2017), accounting for 0.
The main purpose of this research is to provide an overview of trade potential between Iran and Russia with a focus on the structure of Russian economy during the years 1991-2017.
We will finally model a contingency table that presents a brief explanation of the underlying factors and variables that are important in developing bilateral trade between Iran and Russia.
As mentioned before, Iran-Russia Joint Chamber of Commerce (2016) indicated that banking and monetary issues, transportation, high tariff customs and export licenses are the major structural barriers in the economic relations of the two countries.
Methodology In an attempt to analyze trade relations between Iran and Russia, we have first investigated the structure of the Russian economy by comparing the value added of dominant economic sectors.