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Volume 0, Issue 0 (12-2024)
Abstract

Aim and Introduction
In most world economies, governments have been proposed as a complementary institution and are bound to interfere in the economy. The degree of government involvement in any economy depends on the political and economic system in that country. One of the government's intervention tools is subsidy payments considered as financial aids aiming at transferring government resources to buyers and sellers. Therefore, one of the most well-known ways of transferring income to vulnerable groups is subsidy payment. This tool has a long history in different economies. In general, subsidies can be divided into four categories: a) based on the government's goals, which include economic subsidies, development subsidies, social subsidies, political subsidies, and cultural subsidies; b) Based on the stages of the goods, which include consumption subsidies, production subsidies, distribution subsidies, service subsidies, export subsidies, and import reduction subsidies and currency savings; c) Based on the classification of the subsidy itself, which includes direct subsidy and indirect subsidy; and d) based on the reflection of its costs, which includes hidden subsidies and open subsidies. Also, regarding the methods of applying subsidies, it should be noted that subsidies in the consumption sector are mainly paid in cash, goods, general prices and coupons. On the other hand, the payment of subsidy will disrupt the price system and lead to deviation in production and investment.
Since governments dependent heavily on oil revenues usually seek to pay subsidies in general, they normally encounter many problems including waste of resources, increase in consumption, smuggling, lack of efficient allocation of resources and reduction of efficiency in the economy. This happens because the price of subsidized goods is not realistic. For this purpose, Iran and other developing economies are seeking to apply the policy of targeting subsidies. One of the results of policies targeting subsidies is the realization of prices, which will improve the performance of producers and choose an optimal production process.
Since targeting subsidies has significant effects on the relative advantage of manufactured goods and subsequent sustainable growth and development, therefore, it is crucially important and essential to investigate the effects of this policy on the business model.
A review of the experimental studies conducted inside the country indicates that the effect of reducing (eliminating) the subsidy of basic goods (Sections 25-22 in the software package of the Global Trade Analysis Project) on the trade pattern has not been investigated so far.
In this regard, the aim of the current research is to investigate the effects of reducing (eliminating) subsidies for basic goods (sections 22-25 in the software package of the Global Trade Analysis Project) on Iran's trade using the GTAP model.
Methodology
The Global Trade Analysis Project model is one of the types of Computable General Equilibrium (CGE) models, the software related to it (GEMPACK, RunGTAP) and the database are provided to the researchers by its designers.
In the current research, the data has been gathered in the form of four sectors (dairy, rice, sugar and other foods) and two regions (Iran and other parts of the world) and the analysis has been done in two scenarios which are designed as follows:
1) 50% reduction in the subsidy paid to the firm's consumption-domestic goods.
2) 100% reduction in the subsidy paid to the firm's consumption-domestic goods.
Findings
The results showed that in both scenarios, the economic welfare of Iran and the rest of the world decreased and increased, respectively, and the intensity of these changes is greater in the second scenario (removal of basic commodity subsidies). The share of resource allocation efficiency and term of trade and savings-investment relationship in reducing economic welfare is higher in the second scenario. The highest decrease in economic welfare in the first and second scenario is related to sector 25 and the lowest decrease in economic well-being in both scenarios is related to sector 22.
Reducing the subsidy paid on the firm's consumption-domestic goods in these sectors will increase the export of these goods. The most positive changes in Iran's trade balance in the first scenario (50% reduction in subsidies) are related to sector 25 and equal to 48.4 million dollars, and the most negative trade balance of Iran in the second scenario (complete elimination of subsidies) is related to sector 25 and equal to 7.96 has been negative. In total, the reduction of subsidies for basic goods simultaneously in all 4 sectors has led to positive changes in Iran's trade balance.
Discussion and Conclusion
According to the economic results of this research, it is recommended to gradually remove the subsidy paid to the firm's consumption domestic goods so that, while having a positive effect on the changes in Iran's trade balance, the economic welfare does not face a large and one-time decline


Volume 3, Issue 2 (12-2021)
Abstract

COVID-19 pandemic, as an unprecedented phenomenon in the modern world, has considerably damaged the international trade, business and supply chain. Previous researches show that although, some restrictions and quarantine are helpful for decreasing the negative impacts of the pandemic, but these have cause trade and economic crisis. In this environment, the World Customs Organization (WCO) plays a pioneering role in combating against the damaging effects of the COVID-19 pandemic. It has invited all its members to share their best practices and policies for preventing the spread of the pandemic. The WCO categorizes them into 4 distinctive groups: facilitating the cross-border movement of relief and essential supplies, supporting the economy and sustaining supply chain continuity, protecting staff and society. This research shows that the mentioned practices and policies can significantly reduce the trade and economic recession of the pandemic and implementation of these practices in critical times can be useful to promote the economy and trade and can help the researchers, policy-makers and stakeholders in combating the negative effects of the pandemic.

Volume 6, Issue 2 (5-2024)
Abstract

ntroduction
The importance of the role and maritime position of Iran and the use of the facilities of Iran's coasts provide the basis for their use in order to economic and social development and growth through sea-based developments. This article tries to prepare the ground in order to realize the goals of sea-based development, considering the appropriate capabilities of Iran's economic, commercial and maritime trade facilities. This article proposes that one of the most important points to follow up the sea-based development is the application of consistent management and its acceptable efficiency. At the beginning of the article, the importance of Iran's position and maritime capabilities in the process of development and growth is examined. This article examines the historical background of Iran's maritime areas, and then the importance of economic and commercial communications at the national, regional, and global levels is pointed out from the perspective of the development of sea-based programs. In relation to these factors, the theoretical texts are reviewed and the importance of knowledge-based management for the realization of the goals is enumerated and then, the areas of realization of the planed programs are taken into consideration. This case, in a categorized form, brings up the role of management in organizing and directing coastal development programs and emphasizes the need to use it in order to achieve the goals and the need for comprehensive management. 
Research Method
This article is applied in nature and is descriptive-analytic, and it is done using library resources and inductive inference method. The research purpose is to identify and expound the requirements of sea-based development management in connection with the use of Iran's marine areas.
Research Findings
The most important management plans in the realization of goals and objectives related to the sea-based development can be stated as follows:
Providing the highest level of efficiency in management fields in order to achieve goals and as an important factor in all programs related to plans and actions;
knowing Iran's naval capabilities and potentials and its connection with the surrounding areas and the world;
Management of appropriate port locations in coastal areas in order to achieve industrial, agricultural, livestock, commercial and trade and service programs and their use in order to establish proper economic relations in the development programs of the country;
Access to suitable port capacities in line with the specialized concepts related to them;
Access to the required public and infrastructure facilities based on their efficiency;
The possibility of having coastal and post-coastal transportation facilities in terms of their connection with the internal regions of the country, along with the connection of these facilities with intercontinental transportation and major shipping routes;
Obtaining the required port services in terms of understanding the demands and land and sea transports;
Acceptability of achieving the desired and required port workflow, including container services and all types of cargo and passengers;
Obtaining the required marine services such as guiding and towing ships, rescue fleets and coastal dredging equipment;
Access to port support services, such as shore supports for ships and container repairs, storage, waste and water and sewage collection, communication facilities, and banking and commercial services;
Fulfillment of executive needs including marketing, human resource development and training, technical equipment, information and statistical system resources;
Clarity of financial implementation plans such as self-governing plans and profitable financial workflow, removing or solving the problems of unprofitable services and preparing the grounds for profitable investments according to market conditions and at the domestic, regional and global levels;
The efficiency of ports and, if necessary, the use of new ports in order to realize economic plans;
The ability to have sea-based development programs based on national laws and regulations and the hierarchy of national training and physical programs;
Having a favorable and acceptable and advanced organization and management, in a way that it is comprehensive, dynamic, diligent and opinionated in achieving the required goals;
Paying attention to the issues brought up by globalization, such as membership in international economic institutions, having criteria and indicators, and division of labor in the global market;
Environmental protection based on national, regional and global standards;
The establishment of competitive economic activities such as access to the private sector, port activities, stock market, regional and global competitions, based on the safety, health of activities and in the shadow of advanced management;
Meeting social and economic needs in terms of employment, expertise, human development resources, health and recreation and transportation services;
Setting landscape plans, scheduling, budgeting and providing them in line with economic, social and physical developments;
The permanent establishment of training in various specialized service, technical and management fields;
Continuous attention to research programs related to development research related to sea-based developments;
Paying attention to the increase in the investments related to the prosperity of the country's economic market, through the expansion of sea-based economic and social exchanges;
Complete coordination with environmental structures in connection with all types of constructions according to natural, human, physical, technical, temporal and spatial conditions.
Conclusions
In the current situation, Iran's maritime trade facilities and services, despite their relative efficiency, need to be expanded. The infrastructure of port services in the sea areas needs a complete transformation, regarding that the proposed sea-based development programs requires extensive programs. Iran's coasts have had various functions throughout history, which have continued until today and have had ups and downs. In order to expand sea-based activities and realize sea-based civilization, it is necessary to plan and manage extensively in order to achieve the goals. It is appropriate to make use of these facilities and Iran's convenient position in the Middle East and the world, and Iran's access to different parts of the world, including lands that play an important role in terms of trade, commerce, population, and technology. In this article, the need for effective management methods was briefly investigated as a guarantee to achieve the advanced sea-based goals.

Volume 7, Issue 1 (5-2015)
Abstract

Exchange and trade have had an important role in the progress of human society. Since exchange is the result of production, and production began for the first time in Iranian Neolithic, thus Iran is the center of the first exchanges in the world. Near Easern Neolithic is known as the era of food-production revolution. Gordon Child has identified three revolutions during the human history. The first one is called “food production revolution”, which has happened in Iranian Neolithic. The secand revolution is “urnaban revolution” belenging to the Bronze Age of Near East and Iran. The third is “industrial revolution”, which was occurred in Europe. In this article, we will consider exchange and trade during the first revolution period. This paper has tried to explain the following: Introducing the Neolithic age with economic approach; Explain scientific theories about trade in the prehistoric era; Identify common models about trade and adapted models of the Iranian Neolithic and Chalcolithic eras; Analyze and explain the oldest commercial material of the world, (Obsidian) based on the archaeological findings of Iran; Study, the first counting objects and commercial seals at the Sites like sialk Kashan and Goytappe in Western Azarbaijan.

Volume 7, Issue 2 (4-2019)
Abstract

Aims: In the new sight of the world, water is considered a good. Hence, commodity exchanges are important matters among nations. In this regard, local and international trade of virtual water as agricultural crops is an important subject in water resources management.
Instruments and Methods: In this study, the virtual water of two main exported products (watermelon and melon) in Iran during 2003-2013. Some indicators, which are used in the water resources management, such as water use intensity and water dependency, were analyzed.
Findings: By present assessment, during this period, 218.07 MCM of water in the form of virtual water was transferred from the country to outside. By efficiency calculation, it was obtained that irrigated watermelon production had the highest efficiency.
Conclusion: The results showed that producing these products in Iran was completely hinged on the internal water resources. Additionally, in watermelon is evaluated 12 times more than melon and these results warn us to have a more precise plan for the allocation of the lands for different kind of agricultural activities.


Volume 7, Issue 3 (10-2016)
Abstract

Prohibition of the slave trade that started from the late 18th century from France and gradually spread over  the Europe; At the beginning of the 19th century it came to Asia and then to the Persian Gulf region. The leader of this process in the Persian Gulf were English people who were somehow trying for more consolidated position and Protection of their interests in region. The struggle continued to early 20th century. Causes formation and persistence of this process for almost a century, are significant issue that is dealt with in this study through critical discourse analysis of Norman Fairclough. This method has an Intertextual approach and texts as Susceptible Graph Processes, movements and political and social change applies. Therefore, the present research focused on  selecting of a portion of the notes by Amir Kabir and Justin Sheil, minister in Tehran, that between 17 Rabi al- Thani to 10 Jumada al-Awwal 1267 concerning the prohibition of the slave trade were written, this process has analyzed and thereby, influence and dominate the "discourse imperialism" in the relations of power and in contrast the weakness of rule-based "discourse absolute despotism" of Qajar, the main causes for the formation and persistence  of the struggle against slave trade during this period, has been considered.  

Volume 8, Issue 1 (4-2008)
Abstract

ECO is one of the relatively successful regional trade associations over the world and Iran is also an active member since it has been founded. After collapse of the Soviet :union:, a group of new independent Moslem countries along with Afghanistan has joined the ECO. Since Russia and China have strong economy and located in the ECO member regoin, this study examines the effects of joining these two countries in the ECO. Based on the econometric estimates of gravity models, in the first model in which the common border among countries under study is not considered, the joining of Russia will increase the volume of trade among the countries compared to the current situation. In the second model in which the common border is considered, the greatest trade will be achived when both countries, Russia and China, join the ECO. Based on the findings of three different models, if Russia and China join individualy, the average increase in the capcity of trade among the ECO members will be 74.0, 67.4, and 42.1 percentage.

Volume 8, Issue 2 (4-2006)
Abstract

This paper examines the effects of agricultural land productivity improvement on the economy of Iran assuming that the domestic and international trade liberalizations will open up the opportunities to expand market access. A 25-sector computable general equi-librium model was developed to simulate the effects of this policy. The simulation results indicate that enhancing agricultural land productivity while implementing trade policy reform results in an expansion of agricultural sector which, in turn, leads to the expansion of food manufacturing and service sectors and mitigating the problem of unemployment. Furthermore, improving land productivity results in a decrease in the price of food prod-ucts and an increase in real GDP. Consequently, food security enhances and Iranian wel-fare improves. As a result, this is an appropriate domestic policy for Iran. This policy re-sults in an expansion of agricultural sector which in turn leads to expansion of food manu-facturing and service sectors, mitigates the unemployment problem, improves the Iranian welfare as the real GDP increases, and improves the food security in Iran, as the price of food products decreases.

Volume 8, Issue 3 (10-2008)
Abstract

This paper investigates the quantitative Effects of ECO Trade agreement(ECOTA) implementation on trade development of Iran. For this purpose, the amount of tariff reduction effects on Iran’s exports(to) or its imports( from) ECO members is estimated and analyzed. The results indicate that with implementation of tariff rate reduction in ECOTA framework, Iran’s exports to ECO countries in 2008 relative to base year(2003) will increase about 1.27 million U.S. dollars( only to Pakistan). Also, Eco members’ imports from Iran will not be substituted by imports out of region. A review of ECO members with reference to taking effect them from ECOTA implementation means that except for Pakistan and Uzbekistan, None of them are obliged to tariff reduction up to 10% marginal rate. On the other hand, Iran’s tariff rate reduction in the ECOTA framework results in increasing 18.99 million U.S. dollars in Iran’s imports from ECO countries. Regarding a substitution-price elasticity near to zero for Iran’s imports from ECO countries and despite of discriminatory tariff reduction of imports from these countries, Iran will not substitute the imports originating from ECO by importing from other countries out of region. Indeed, an 18.2 percent tariff rate reduction in Iran’s imports from ECO will result in 1.6 percent increase in total imports from these countries.

Volume 8, Issue 4 (1-2009)
Abstract

Most debates on the role of trade openness and the wage inequality are based on the well-known Hecscher-Ohlin and Stopler-Samuelson (HOS) theories. According to the Heckscher-Ohlin theory, Countries have comparative advantages in those goods for which the required factors of production are relatively abundant locally while the Stopler-Samuelson theory refers to the income distribution effects of trade openness. In this paper, a computable general equilibrium (CGE) model and social accounting matrix (SAM) approach are used to assimilate the effect of tariff cuts on the earnings of production factors and relative wages by using Iran's data for 2001. The results confirm that general tariff cuts lead to a decrease in wage inequality while it leads to an increase in wage inequality in the foods, apparel and textile sectors. However, tariff cuts in agriculture sector reduce wage inequality.

Volume 9, Issue 1 (4-2009)
Abstract

Sustainable economic growth is one of the most important macroeconomic objectives. There are various factors affecting economic growth including trade and extent of the market. The aim of this study is to examin the effect of trade and extent of the market on economic growth in Iran and its trading partners using the data over the period 1995-2005. Trading partners comprise Germany, Italy, Singapore, Netherlands, China, Japan, the United Arab Emirates, India, France, South Korea, Kuwait, Sweden, Switzerland, USA, Azerbaijan, Greece, Pakistan, Spain, Turkey, Bahrain, Austria, Saudi Arabia, Tajikistan, the United Kingdom, Qatar, Brazil, Armenia, Thailand, Indonesia, and the Syrian Arab Republic. A growth regression model is used to model the relationship between economic growth, trade and extent of the market. The OLS technique is employed to estimate the growth model. Three openness measures are include in the model. They comprise nominal openness, real openness and geography-fitted real openness. We find that trade and domestic market size are robust determinants of economic growth over the 1995-2005 period when trade openness is measured as the US dollar value of imports and exports relative to GDP in PPP US$ (real openness). When trade openness is measured as the US dollar value of imports and exports relative to GDP in exchange rate US$ (nominal openness). However, trade and the size of market are non-robust determinants of growth. We argue that real openness is the more appropriate measure of trade. Moreover, when geography-fitted real openness is considered as a measure of trade openness, it has a strong effect on economic growth in countries with smaller domestic market.

Volume 9, Issue 4 (3-2010)
Abstract

Economic liberalization policy has been among the major concern of the governments during the last few decades. However, its impact on economic growth is still a controversial issue. The aim of this paper is to examine the impact of trade liberalization and financial development on economic growth in Iran using annual observations over the period 1973-2007. The current study would use ARDL technique to estimate the empirical model. The findings of this paper indicate that there is a long run positive and significant relationship between trade liberalization and financial development and economic growth in Iran over the period of the study. The error correction coefficient is around 0.32 showing that the adjustment towards the long run equilibrium takes place within almost three years. The Granger causality test indicates that causality runs from trade liberalization and financial development to GDP.

Volume 10, Issue 1 (4-2006)
Abstract

With the beginning of the third millennium and the passage of about 300 years since the Industrial Revolution, the scope of operation and competition in the business enterprises has increased to a global level. Automotive industry of Iran with more than 40 years of domestic operation and allocating 2.5%of GNP, 20% value added in Industrial Sector and 2.5% of total investment in the country has not yet achieved an outstanding position in the world markets. So to prevent unfavorable (but possible) challenges in the future, it seems necessary to assess the international competition potential of this industry according to a contingent strategic model. Reviewing the current international trade theories and internationalization models of firms indicates that most of these theories and models are developed based on fundamental assumptions governing the open market in developed countries. In addition, most of these models have evolved by the post studies on the large scale multinational corporations after their internationalization process. The most important point is that each of these theories and models studied the internationalization process from a specific level of analysis (firm, industry, country, international environment). So none of these models individually and completely can be generalized to address a suitable solution for those firms operating in developing countries and struggling to enter the international markets. The main purpose of this paper is proposing a contingent international market entry model for firms operating in developing countries (like Automotive Industry of Iran) through integrating the different points of view. The model contains four levels of analysis (firm, local industry structure, national competitive policies, and firms’ international relationship with global ones). It integrates and examines the role and effects of four interdependent variables (firm characteristics, local industry structure, national policies and firms’ international relationships) shaping the strategic capabilities and competencies, which are necessary for entering the international market (as the outcome /dependent variable). The model was examined in the Iranian Automotive Industry. It indicates how the international market entry competency of a firm in developing countries is affected by it’s core competencies, synergy of local industry structure, synergy of national competitive advantage, and collaborative advantage and complimentary effect originated from international relationship between the firm and the global market.

Volume 11, Issue 2 (8-2011)
Abstract

This paper seeks to respond to this major question that if Iran accedes to the World Trade Organization (WTO) and observes copyrights, in the realm of intellectual property, what demand and supply changes would occur in Iran’s book market. To respond the above question first some instances of breaching the copyrights in book publishing sector is investigated. Then calculating the price and income elasticity, the impact of observing the copyrights on price and income, and therefore on the demand and supply for books in short term is demonstrated. The findings of this research reveal that with accession of Iran to WTO and observation of copyright, some of the subsidies to the book sector must be terminated, and also the non-national authors would receive royalties. With elimination of subsidies and payment of royalties book price will increase by an average of 7.5 percent and demand would decrease by 13.35 percent. But, supply will show less sensitivity and its increase in short term would be insignificant. Yet, as experienced in other countries, for numerous reasons such as entering the international markets and increased quality, the printing volume of books will increase. In long term, the experiences of other countries have shown the same trend.

Volume 11, Issue 3 (10-2011)
Abstract

Using Haskel theory, in this paper the main factors of change in wage ratios of agricultural and non-agricultural labor force are explored. Theoretically, the wage gap between these two sectors is explained by the gap between price and the one between TFP of these two sectors. In recent years, the wage gap between the two sectors has been decreasing in Iran. The international trade model (Haskel model) has been used in this paper and the results reveal that the major factor contributing to wage gap is the price one. The TFP is considered insignificant for wage gap. Mainly, the reason for increasing agricultural product index price, compared to that of non-agricultural index price has been government protection of agricultural products during these years.

Volume 12, Issue 4 (1-2013)
Abstract

Ramsey model is one of the most important basic models to study intertemporal resource allocation. This model is derived from microeconomic optimal principle so it has a key role in macroeconomics with micro foundations. Hence, in many economic researches it is considered as a reference theory. Application of this model in economy of Iran will provide an appropriate theorem framework for explaining empirical facts of the Iranian economy and will introduce a new approach to researchers. The main idea of this study is generalizing Ramsey model through including terms of trade and its calibration in the economy of Iran. For this purpose first, the model is explained. Then, the first order condition is derived and mathematical optimal path of variables is solved.  Finally, the model is calibrated by GAMS package for economy of Iran in time period (2006-2036). The results indicate that there is a feasible solution for model and the optimal path of variables can be observed. The optimal path of Gross National Production and Consumption are increasing but the optimal path of capital stock and investment is primarily increasing then decreasing. In the final section of this paper a sensitivity analysis is presented. Some scenarios are designed for the important parameters of model like time preferences rate, intertemporal substitution elasticity of consumption, labour growth rate and output elasticity of capital. Sensitivity analysis shows that output elasticity of capital and labour growth rate increased the social welfare and shifted optimal path of variables upward. But time preferences rate and intertemporal substitution elasticity of consumption had inverse effect on social welfare and optimal path of variables.
Re’za Rai’ss Tousi,
Volume 13, Issue 1 (1-2006)
Abstract

Seistan was one of the important ancient urban centres in south eastern Persia. The ruins of the city show the prosperity and fertility of this city to the extent that a British civil officer considered it as the ancient London of Asia. This article attempts to describe the enormous latent wealth of this ancient city which made it important for strategic, political and commercial reasons. Due to strategic importance, it fell into the power struggle of 19th and 20th century especially between British and Russia. This power game was the main reason of the poverty of the peasant of Seistan. East India Company had extensively taken Seistan as the major point for its trade after its penetration in Afghanistan and likewise Russia’s penetration in the Central Asia. Western penetration in Seistan had already started in 1809. When Samarqand was annexed in 1867, the British raised the question of establishing neutral zone between Britain and Russian in Central Asia. In 1872 thus, Seistan was divided between Afghanistan and Persia. Government of India had proposed building a new trade link between Quetta and Seistan, just to establish the supreme interest of Britain in those parts of Persia bordering Baluchistan. In the later half of the 19th century, the whole policy of the British government was to capture the strategic locations to further its economic interest, which are evident from the official and non-official records. With this evil intention and local power struggle, the richness and fertility of Seistan was destroyed and local peasantry faced dire straits.

Volume 13, Issue 1 (9-2021)
Abstract

Shah Abbas of Safavid dynasty, with a powerful government as the result of the sharing of slaves in power, and giving them military posts; suppressed the force and elements of violence, and gradually strengthened security throughout his realm; roads were fairly safe , theft , killing and robbery was reduced and Trade and transport prospered. Accordingly, some historians describe Abbas's era as golden age and the economic flowering of the Safavid period. this conception is directed towards the institutional changes of shah abbas in the political and Social sphere which led to political centrality, road security, construction of Caravanserais and markets, the creation of cities and the establishment of trade relations with foreign countries. although these measures were favourable to the development of trade, and as a result of the reforms, great development occurred in business and The trade boom followed in the short - term but, however, was the kind of economic reform that led to the long - term accumulation of capital and stable economic growth. this is due to institutional barriers which North are divided into formal and informal constraints. this study examines the institutional changes and business conditions and the position of merchants in Shah Abbas I first regarding the theory of Douglas North and tries to examine the economic situation in Iran in the age of Shah Abbas with the theory of New Institutionalism and based on the theory of Adaptition with Linda Hutcheon.
 
 

Volume 13, Issue 2 (10-2009)
Abstract

Today, due attention of the countries, traders and policy makers to free trade zones is among the first priorities of the economic policies of the world. Because these zones play an important role in the economic development of the world. In this paper, evaluation and prioritization of Iranian free trade zones was using the MADM method. The main goal of this research was to optimize the re-allocation of economic recourses. The results indicated that the Kish free zone is of higher priority comparing with the other free zones. The results of this research and prioritization of free trade zones could be highly useful in increasing the F.D.I. and access to world and regional markets.

Volume 13, Issue 3 (9-2013)
Abstract

Tax evasion linked to imports is a cause for forming informal economy. Tax evasion decreases government revenue and makes restrictions in implementing economic policies. This paper investigates relationship between the tariff rate and tax evasion at the six- digit HS level on trade data of Iran and its twelve major trading partners during 2003 to 2008.  According to Bhagwati method, Tax evasion is defined as the discrepancy between the value of imports, reported by Iran, and the value of exports to Iran, reported by its trading partners. The results from estimated tax evasion models show that there is positive and significant relationship between the trading discrepancies or tax evasion and tariff rates among 27917 products. The elasticity of tax evasion with respect to tariff rates is 0.67, i.e. each one-percentage-point increase in the tariff rates raises tax evasion by 0.67 percent in case of total products. Additionally, the elasticity of tax evasion with respect to tariff rates is 0.8 for goods having tariff rates above average. In this case, tax evasion is more likely. The positive impact of tariff rate on tax evasion is not verified for goods having tariff rates lower than average.

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