An Analytical Review and Prioritization of Barriers to the Development of Non-Oil Exports in Iran: FAHP Approach

Ahmadi, Akbar

doi:10.22055/jqe.2021.37103.2359

Document Type : Research Paper

Author

Akbar Ahmadi

Member of the Applied Economics Group, Economic Research Institute, Allameh Tabataba'i University, Tehran, Iran."

https://doi.org/10.22055/jqe.2021.37103.2359

Abstract

EXTENDED ABSTRACT
INTRODUCTION
One of the serious issues that has been considered and examined by policymakers, economic, and trade professionals in Iran for many years is the development of non-oil exports and the existing obstacles to its development. This issue arises from the fact that export development, as a trade strategy, is recognized as the engine of economic growth, progress, and development in countries. Similarly, identifying and striving to remove the factors that hinder export development is also of particular importance. This is because export development and foreign exchange generation, in addition to increasing national income and improving the foreign balance, can also enhance the country's bargaining power on the international stage, especially in times of economic sanctions and from a political perspective.
Some of the problems and shortcomings in export development or target market expansion are domestic, such as the high production cost of Iranian goods compared to competing products due to the unreal exchange rate, exporters' lack of awareness of various banking export services, the lengthy process of granting loans, and low productivity of production factors, among others. On the other hand, some problems are external, such as the hostile trade policies of powerful global countries and the inability to participate in international trade-facilitating forums and organizations. Prioritizing these issues and challenges for resolution is of great importance."
METHODOLOGY
The research follows an applied methodology using a descriptive-survey approach for data collection. It analyzes customs records from 2001 to 2018 and qualitative data from a 2017-2018 survey of exporters by the Trade Promotion Organization of Iran to identify and prioritize export barriers.
The data analysis is conducted using the Fuzzy Analytical Hierarchy Process (FAHP), a method designed for decision-making under uncertainty. FAHP uses triangular fuzzy numbers to evaluate and compare export barriers based on multiple criteria. This method allows for flexibility in the number of independent variables but may face reliability issues if expert judgments are inconsistent. The study aims to systematically rank the key barriers to non-oil export development.
FINDINGS
The findings of this article reveal that the country's non-oil exports from 2001 to 2018 fell short of the projections outlined in the Sixth Development Plan. Both market concentration and the diversity of exported goods have declined. On average, 25% of the total annual value of non-oil exports during the study period came from the sale of just five products. The number of countries importing goods from Iran also decreased from 170 in 2008 to 147 in 2018. In 2018, more than 80% of the value of non-oil exports was concentrated in just nine countries. This indicates that despite an increase in export value, non-oil exports have become heavily concentrated in a few countries, largely due to factors like political and economic sanctions. In fact, the combined export value to four countries—UAE, China, Iraq, and South Korea—exceeded the total export value to the other 145 countries in 2018.

CONCLUSION
According to the prioritization of export development challenges in this article, the most important issues relate to the "production of export goods," followed by the "export process" and the "overall political and economic environment" of the country. The ten main barriers to the development of non-oil exports in Iran are:

High production costs,
High exchange rates for imported raw materials,
U.S. sanctions against Iran,
High transportation costs to target markets,
Short-term product pricing strategies focused on immediate profit,
Foreign policy issues,
Lack of understanding of customer preferences and needs,
High tariff rates imposed by target countries,
High costs for obtaining sales permits from domestic authorities,
High taxes on the import of raw materials and high customs clearance costs.

Keywords

Main Subjects

International Trade

References

Afshari Mofrad, M., Adeli Nik, H., & Sheikh Alishahi, M. (2021). Prioritizing Trade Policy Tools for Promoting High-Tech Products Exports: Focusing on Nanotechnology and Biotechnology Firms. Commercial Surveys, 18(105), 1-30. dor/20.1001.1.26767562.1399.18.105.1.4. [In Persian]

Ahmadi, Akbar (2019), An Investigation of the Barriers to the Development of Non-Oil Exports in Iran, Research Project, Research Center of the Islamic Consultative Assembly. [In Persian]

Agasha, N. (2009) Determinants of export growth rate in Uganda1987-2006, Uganda revenue authority, research and planning, Kampala, Uganda,

Akhavi, Ahmad (1994), A Study on Theories, Applications, and Experiences in International Trade, Business Strategy, and Economic Development, Institute for Business Studies and Research, Tehran. [In Persian]

Alexandrides C.G. (1971). How the major obstacles to exporting can be overcome Atlantia. Economic Review, (2): 2-15.

Alipour, Hamid Reza, & Ghodakji., Maryam (2011), Study of the Relationship Between Trade Development and Economic Growth in Iran, Labor and Society Monthly, 141. [In Persian]

Alshehri Abdulrahman Mohammed, Geng Xianhui &Syed Ahsan Ali Shah(2021), Non-oil economic transition for economic and environmental sustainability in Saudi Arabia: a multi-factor analysis under fuzzy environment, Environmental Science and Pollution Research Environ Sci Pollut Res 28, 56219–56233 (2021). https://doi.org/10.1007/s11356-021-14304-8

Ansari Nasab, M., & pas, P. (2022). Investigating the rate of transfer of regime in the asymmetric effect of exchange rate on Iran's non-oil exports. Quarterly Journal of Quantitative Economics (JQE), 18(4), 93-124. doi: 10.22055/jqe.2020.31521.2166. [In Persian]

Awokuse, Titus O. and Dimitris K. Christopoulos.(2009) Nonlinear Dynamics and The Exports–Output Growth Nexus, Economic Modelling, Volume 26, Issue 1, Pages 184-190

Azar, Adel (2017), Applied Decision Making (Based on MADM), Sokhan Publishing, Tehran. [In Persian]

Cadot, O. et al (2012), Trade Diversification, Income, and Growth: What Do We Know?, Journal of Economic Surveys. 27, 790-812.
https://doi.org/10.1111/j.1467-6419.2011.00719.x

Chia Yee Ee(2016), Export-Led Growth Hypothesis: Empirical Evidence from Selected Sub-Saharan African Countries, Procedia Economics and Finance 35, 232 – 240.

Da-Yong Chang (1996), Applications of the Extent analysis method on fuzzy AHP, Eouropean Journal of Operational Research, 95, 649-655.

Dejpasand, Farhad, and Hossein Sabouri (2008), The Impact of Export Promotion Policy on Non-Oil Sectors Growth in Iran, Journal of Financial Economics (Financial Economics and Development), 1(3), 45-64. [In Persian].

Dini Torkamani, Pouria (2012), A Review of International Trade Theories, Economic Journal (Monthly Review of Economic Issues and Policies), 2. [In Persian]

Duran, O and J.Aguilo(2008), “Computer-aided machine-tool selection based on a Fuzzy-AHP based approach”, Expert Systems with Applications, 34, 1787-1794.

Edwards, S. (1992). Trade Orientation, Distortions and Growth in Developing Countries, Journal of Development Economics, 39(1), 31-55.

Esfahani ,H.S (1996). Exports, Imports and Economic Growth in Semi.Industrialized Countries. Journal of Development Economic , 35, 93.

Fahim Al-Marhubi(2000), Export Variety and Country Productivity, Department of Economics, University of California, Davis and NBER.

Fahim Al-Marhubi. (2010). Export Diversification and Growth: An Empirical Investigation, Applied Economics Letters, 559-562, https://doi.org/10.1080/13504850050059005.

Feder, G,(1982).On Exports and Economic. Journal of Development Economic, 12(1), 59. https://doi.org/10.1016/0304-3878(83)90031-7

Hadi Zonnouz, Behrouz (1997), Trade Strategy and Industrial Development in Iran, Ph.D. Thesis, Faculty of Economics, Allameh Tabataba'i University. [In Persian]

Hosseini, Mir Abdollah, & Mir Gader Hosseini (2009), Selected Experiences of Successful Countries in Export Development, Commercial Surveys, 34, 2-18. [In Persian]

Jalili, Zahra (2013), Investigation the Relationship between Non-oil Exports, Foreign Investment and Economic Growth in the MENA Region, Economic Growth and Development Research, 13. Dor/20.1001.1.22285954.1392.4.13.2.1. [In Persian]

Kavehian (2006), Study of Barriers to Marketing Development in Iran's Exporting Manufacturing Companies, Institute for Trade Studies and Research, Tehran. [In Persian]

Kavoussi ,M.R,(1984).Export Expansion and Economic Growth: Further Empirical Evidence. Journal of Development Economic,14(1), 241.250 https://doi.org/10.1016/0304-3878(84)90052-X.

Kotler, F. & Armstrong (2000), Principles of Marketing, translated by Ali Parsaeian, Adabestan Publishing, Tehran. [In Persian]

Krugman, Paul (1999), Strategic Trade Policy and the New International Economy, translated by a group of translators, Institute for Business Studies and Research.

Lopez, R. (1991). How Trade and Macroeconomic Policies Affect Economic Growth and Capital Accumulation in Developing Countries, Working Paper Series No. 625, Country Economics Department , Washington, DC, World Bank

Mau, K.(2014), Export Diversiﬁcation and Income Differences, Institute of Asian Studies, Rothenbaumchaussee 32, 20248 Hamburg

Mir-Ghorbani Ganji, M. (2013), Examining the Barriers to Non-Oil Export Development and Identifying Factors Strengthening Exports, Intelligent Industry Magazine, Issue No. 151. [In Persian]

Mofradi, Sanaz, & Mohammad Sheikhzadeh (2016), The Influence of Exporters’ Features on Perceived Obstacles to Regional Export Development, Journal of Business Administration Research, 15, 165-184. Dor: 20.1001.1.2645386.1395.8.15.8.5 [In Persian]

Mohammadkhani, Samaneh, Mohammad Hassan Fotros, and Mohammad Molaei (2020), Measuring the Short-Term and Long-Term Effects of Factors Affecting the Export of High-Tech Product Groups in Iran, Journal of Economic Modeling Research, 11(41). http://dx.doi.org/10.21859/jemr.11.41.7. [In Persian]

Motevaseli, M. (2001), Trade Policies and Economic Development, 1^st ed. , Institute for Trade Studies & Research, Tehran, Iran,. [In Persian]

Nazemi, Farzad (2009), The Impact of Macroeconomic Variables on Non-Oil Exports, Industrial Management, 4(10), 105-117. SID. https://sid.ir/paper/171134/en. [In Persian]

Palley, T. I. (2011), The Rise and Fall of Export-led Growth, Working Paper, The Levy Economics Institute, Annandale-on-Hudson, NY 12504-5000

Parul Gupta and Sumedha Chauhan (2020), Firm Capabilities and Export Performance of Small Firms: A Meta-Analytical Review, European Management Journal,

Pineres, S.A.G. & M. Ferrantino.(1997). Export Diversification and Structural Dynamics in the growth Process: The case of Chile. Journal of Development Economics. , Elsevier, vol. 52(2), 375-397 https://doi.org/10.1016/S0304-3878(96)00446-4

Pourashraf, Y. (2014). Explaining the Problems and Barriers of Export Development in Ilam Province. Journal of Business Management, 6(1), 1-20. Dor: 20.1001.1.20085907.1393.6.1.1.1 [in Persian]

Rahmany Youshanlouei, H. , Ansari, M. , Mirkazemi, M. & Ebrahimi, M. (2013). Identifying and Prioritizing the Export Barriers and Proposing Initiatives to Developing Small to Medium Enterprises (SMEs) Export Case Study: Feed Industry in West Azerbaijan. New Marketing Research Journal, 3(1), 139-160. https://nmrj.ui.ac.ir/article_17637_en.html [In Persian]

Rasoulinejad, Ehsan. (2020). Ranking of obstacles in growth of Iranian non-oil exports to Russia by using the Analytic Network Process. Commercial Surveys, 18(100 ), 30-45. [In Persian]

Saeiyda Ardakani, S., & Sayyadi Toranlo, H. (2013). Analysis of Challenges and Strategies for Developing the Non-Oil Exports: A Case Study of Yazd Textile Industry. Organizational Culture Management, 10(26), 109-128. doi: 10.22059/jomc.2013.29924. [In Persian]

Safar Fazli, and Elham Sadeghian (2015), The Role of Macroeconomic Factors on Iran’s Non-Oil Exports to Turkey, Economic Development Research, 17. [In Persian].

Samadi, Ali Hossein (2008), Evaluation of the Impact of Geographic and Commodity Diversification of Exports on the Instability of Export Revenues (1991-1997), The Second annal Conference on Commercial Policies and International trade: Papers and Proceedings: Institute for Trade Studies and Research, Ministry of Commerce. [In Persian]

Seifollahi, Naser. (2022). Analysis of the Effect of EXIM Bank Efficiency on Non-Oil Export. Quarterly Journal of Quantitative Economics(JQE), 19(1), 73-100. 10.22055/JQE.2021.37311.2370. [In Persian]

Shakeri, Abbas, and Amin Maleki (2010), The Relationship Between Non-Oil Export and Economic Growth in Iran, Quarterly Journal of Economic Research and Policies, 56, 5-36. http://qjerp.ir/article-1-221-fa.html [In Persian]

Stiglitz, Joseph (2014), Globalization and Its Discontents, translated by Hassan Golriz, Ney Publishing, Tehran. [In Persian]

Taghavi, Mehdi, & Nemati Zadeh, Sina (2005),The Impact of Macroeconomic Variables on Non-Oil Exports in Iran's Economy, Journal of Economic Research, 4(14), 71-96. [In Persian]

Tesfom, G., Clemens Lutz. (2006). A classification of export marketing problems of small and medium sized manufacturing firms in developing countries. International Journal of Emerging Markets, 1(3): 262-281.

The World Bank, (2020), Trading for Development in the Age of Global Value Chains, 1818 H Street NW, Washington, DC 20433

Vali Beigi, Hassan (2006), Opportunities, Barriers, and Requirements for Iran's Presence in Dynamic Sectors of Global Exports, 1^st ed, Institute for Trade Studies and Research. Tehran, Iran. [In Persian]

Wang, Li-Xin (1997), A Course in Fuzzy Systems and Control, Prentice-Hall International, Inc.

Yavari K, Ashrafzadeh H R, Ahmadzadeh K. (2010), Exports Diversification and Productivity in the Iranian Manufacturing Industries. The Economic Research (Sustainable Growth and Development) Vol. 10, Issue 3, pp. 53-73. Dorl.net/dor/20.1001.1.17356768.1389.10.3.4.9. [In Persian]

Zafar, U., Ahmed Craig, C., Julian, Mahajar, A.J. (2008). Export Barriers and Firm Internationalization: A Study of Lebanese Entrepreneurs. Journal of management and Word business research, l3 (1): 33-41.

Zaribaf, Seyed Mehdi, Nasrin Parastesh, Sara Asadbeigi, Seiran Gharahmani, and Mohammad Amir Kamali (2007), Identification of Problems and Challenges of Export Unions and Providing Suitable and Effective Solutions for Facilitating Non-Oil Exports, Tehran Chamber of Commerce, Industry, and Mines. Tehran, Iran. [In Persian]

An Analytical Review and Prioritization of Barriers to the Development of Non-Oil Exports in Iran: FAHP Approach

References

References

Volume 21, Issue 4 - Serial Number 83Vol. 21, No. 4, Winter 2025March 2025Pages 39-95

Volume 21, Issue 4 - Serial Number 83
Vol. 21, No. 4, Winter 2025
March 2025
Pages 39-95