The Investigation of the Effect of OIC Integration on Economic Growth of Selected Members

Since long trade has been considered as an engine of growth and development , thus playing a significant role in economic activities. In recent years ,after the introduction of "globalization" and elimination of economic and political boundaries, governments have increasingly focused on economic, political and even cultural integrations in order to enter the global markets and benefit from free trade. Many researchers have investigated the effects of integrations on macroeconomic variables such as economic growth of their members and have reached various conclusions by investigating different types of integrations (e.g. North-North agreement , South-South agreement and North-South agreement ). In this study we have investigated the effect of Organization of Islamic Conference as a South - South cooperation on economic growth of its member countries. we have used Badinger’s model to investigate the effect of economic relations on the growth of eight selected countries (Iran, Indonesia, Malaysia, Turkey, Pakistan, Egypt, Saudi Arab and Kuwait) for the period of 1994- 2004. The result indicates that although Organization of Islamic Conference is a cultural integration, commercial relations of these eight prominent countries of the organization have meaningful positive effect on their growth though this influence is not significant. One possible explanation could be the fact that these countries have not yet taken the necessary influential steps towards economic integration.