Document Type: Original Article

Authors

1 Assistant Professor, Department of Economics, Esfahan (Khorasgan) Branch, Islamic Azad University, Esfahan, Iran

2 Associate Professor, Department of Economics, Esfahan (Khorasgan) Branch, Islamic Azad University, Esfahan, Iran

Abstract

Developmental plans of the country emphasize on the exports-focused growth strategy, and export diversification is one of the most appropriate policies in this area. Export diversification moves from primary goods to industrial goods. Yet, export diversification, according to the principles of international trade, must be based on comparative advantage until to change value-added. Changes in the value-added of industrial activities can show manufacturing and export capabilities of a country and also production growth. Due to the importance and high value-added of the agricultural sector in developing countries, added value and influencing factors  in triple industries of food, wood, and paper are studied. To this end, human capital and physical capital in agricultural triple industries is considered. The variable of weighted comparative advantage of agricultural triple industries and diversification in these industries are considered for the period of 1998 to 2013 by using panel data. The results of the model estimation indicated that, during the period under study, the wood and paper industries had the lack of comparative advantage in the production and export. This variable will have a negative effect on the growth of value-added. Exports diversification is only carried out in food industries; however, this variable had a positive impact on the growth of the value-added of agricultural sector industries. The human capital and physical capital have a high positive effect on value-added of the industries in the agricultural sector.

Graphical Abstract

Highlights

The role of agriculture in economic development, income distribution and justice is concerned governments.

Agricultural diversification implies increasing the variety of agricultural commodities produced at the farm level.

Comparative advantage of industries has an increasing effect on the value added of the industries.

Comparative advantage and export diversification can be two important indexes besides the traditional development factors (labor and physical capital) and have a significant effect on production growth of production sectors in industry sector.

Keywords

Brasili, A., Helg, R., & Epifani, P. (2000). On the dynamics of trade patterns. De Economist, 148(2), 233-257.

Darvishi, B., & Asgari, H. )2007). Orientation of comparative advantage of some newly industrialized countries of South East Asia and its comparison with Iran. Economic Journal, 7(3), 263-297.

Grossman, G., & Helpman, E. (1991). Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press.

Green, William H. (2001). Econometric Analysis. 5th edition. New Jersey: Prentic Hall.

Hasan, R. (2002). The impact of imported and domestic technologies on the productivity of firms: Panel Data evidence from Indian manufacturing firms. Journal of Development Economics, 69, 23-49.

Hayami, Y., & Otsuka, K. (1992). Beyond the green revolution: Agricultural development strategy into new century'. In Jock R Anderson (Eds.), Agricultural technology, policy issues for the international community, The World Bank, Washington, DC, US, 35.

Herzer, D., & Nowak-Lehmann, F. (2006). What does export diversification do for growth? An econometric analysis. Journal of Applied Economics, 38, 1825-1838.

Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. Stata Journal, 7(3), 281.

Karbasi, A. R, Karimkoshteh, M., & Hashemitabar, M. (2005). Investigation of comparative advantage of the cotton production in Golestan Province. Agricultural Economics and Development, 13, 2, 29-50.

Kohansal, M. R., & Zamaninejad, S. A. (2013). Determination comparative advantage of main agricultural products in Fars and Mazandaran provinces during 2006 to 2010; Technical Journal of Engineering and Applied Sciences, 3(11), 987-991.

Osakwe, Patrick. (2007). Foreign aid, resources, and export diversification in Africa: A new test of existing theories. African Trade Policy Paper, 61,Addis Ababa: Economic Commission for Africa.

Shahabadi, A. (2009). Sources of agricultural growth during the years 1963 to 2006. Journal Village and Development, 12(4), 125-147.

Shakeri, A. (2004). Iranian non-oil determinants. Iranian Economic Research, 6 (21), 23- 51.

Shayesteh, A., & Ranjbar, H. (2014, 12 Nov.). The impact of comparative advantage of the nine exports industries and export diversification on the value added of the industries in Iran. The Collection of Papers presented at the Second National Conference on Applied Economics & Management, electronic publishing Toroudshomal, Iran, Mazandaran, Babolsar, and Noelectronicpublishing: 4750-5030.

Taylor, (1994). Restoring Balance between Canadian Society and Environment, New Dehli, International Development Research Center.

Vaez, M., Tayyebi, K., & Ghanbari, A. (2007). The role of research and development costs in value added of high-tech industries, Quarterly of Economic Studies, 4(4), 53-72.

Yazdani, F. (1995). Imports trend evaluation of timber and its products and affect on the economical situation of wood industrial 1983-1993. Unpublished thesis, Paper and wood technology and sciences department. College of natural resources, Tehran University, Iran.

Zamaninejad, A., Abdeshahi, A. (2012).Determination of Comparative Advantage on the Main Agricultural Products, Journal of Basic and Applied Scientific Research, 2(3) , 2428-2433.