Intra Industry Trade between Iran and EU

Document Type : Research Paper




The purpose of this paper is to estimate and study intra industry trade (IIT) types between Iran and EU with respect to recent literature developments in IIT measuring during time period 1997-2003. Results indicate low but increasing IIT between Iran and EU. Furthermore, an important part of this IIT is devoted to vertical intra industry trade (VIIT). Marginal IIT between Iran and EU is also low but overwhelming. In other words, foreign trade change between Iran and EU is mainly inter-industry trade. Furthermore, manufactured products, chemical and related products are leading industries in IIT between Iran and EU. According to the results, it is advised to consider IIT types’ determinants such as horizontal and vertical differentiation, economies of scale, R&D expenditure, FDI, economic integration; as well as taking care and promoting of current comparative advantages.


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