Abstract:
Recent development in the globalization process and interdependence of national economic follow the importance of financial market, economic liberalization policies, technology capital and laber mobility, expansion of consumption market. In this instance, economic integration, expanding trade flows, reduction of barriers and trade constraints are the main activities of national economies. Looking towards to regional union, trade flows, integration could facilitate the process of trade liberalization to help the more cooperation between partners to inter national economics.The propose of this paper is two fold. First examine the succees and failure of the existing preferential trade agreements and regional economic groupings among the IOR-ARC countries. Secondly using the generalized gravity model and panel data during 1999-2004, explains the estimation results.The results show that IOR-ARC potential trade including Iran, while export to others excluding Iran would increase lay 35 percent, would increase 20 percent. Imports from nonmember could be 15 percent higher as the gravity model predicts.
Machine summary:
"Free trade, usage of international investment, specialization in production, omission of commercial and trade restrictions and having access to broad and extended consumer markets are the common specifications of being in an economic integration and economic globalization which can help to make a competitive condition here and can support the competition advantage of national economies.
7 billions dollor Exportes Source: World development indicators (2004) According to table (1), production ability of members is appropriate and implies that countries have potentials to construct an integration block.
Also population indicator of these countries show an extensive international consumption market which is expected for member countries, export and import value of these countries can be increased through promoting trade integration.
In other words, individual units which may consist of manufacturers, consumers, or member countries of economic and regional integrations, are heterogeneous and may have a lot of differences on issues such as historical, cultural, racial, political or other specifications, and they may affect business and in our frame, they may have correlation with the main variables.
Column 2 in the table shows the fixed effect results for estimated model just including traditional gravity variables (gross domestic product, population, and a dummy for trade integration).
5- Conclusion Nowadays international relationships and economic interdependence observed in different countries of world, it can set the link of national economies on the basis of economic variables such as financial markets and capital, foreign investment, size of economy international trade, international production, … and provide integration."