Iranian Journal of Trade Studies

Iranian Journal of Trade Studies

The Impact of Financial Development on International Trade in Iran: An ARDL Approach Mehdi Sadeghi Shahdani1

Document Type : Research Paper

Authors
mahdi sadeghi shahdani 1
mohammad ahmadi 2
mohammad javad FADAEI 3
mohammad kaveh baghbadrani 4
1 Dean of the Faculty of Economics, Imam Sadegh University, Full Professor, Tehran, Iran (Corresponding Author)
2 , Master of Financial Management, Imam Sadegh University, Tehran, Iran
3 Master of Development Economics, Imam Sadegh University, Tehran
4 Master of Energy Economics, Imam Sadegh University, Tehran, Iran
10.22034/ijts.2025.2029233.3986
Abstract
With the ever-increasing expansion of societies and the growing complexity of economic systems, access to foreign markets has become increasingly important. As a result, international trade and its relationship with economic variables have received special attention from policymakers. Therefore, Given the importance of the financial system in new economic theories and the focus on the effect of financial development on, the purpose of this research is to investigate the linear effects of financial development on international trade in Iran using the Autoregressive Distributed Lag (ARDL) for the period of 1380-1400 while also considering other influential variables such as foreign direct investment and inflation rate. The results indicate that the combined index of financial development, which consists of four indexes including financial developmentو money volume index, financial depth, and structural index, has a positive and significant effect on international trade in both the short and long term. Other variables examined in this research, such as the inflation rate, have a negative and significant effect on international trade in both time horizons. Meanwhile, foreign direct investment has no significant relationship with international trade in the short and long term.
Keywords
Financial Development / International Trade / Inflation Rate / ARDL Approach

Subjects

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  • Receive Date 15 May 2024
  • Revise Date 02 January 2025
  • Accept Date 25 January 2025