Analysis of the impact of foreign exchange rate fluctuations on the bilateral trade between Iran and China

Given that China has become Iran’s largest trading partner in recent years, this study aims to examine the impact of bilateral real exchange rate fluctuations on the trade relationship between Iran and China during the period ۱۹۹۲–۲۰۱۷. To investigate this relationship, trade data for exports and imports were divided into ۱۵ major commodity categories. The Autoregressive Distributed Lag (ARDL) model was employed for analysis. The results indicate that, in the long run, exchange rate fluctuations have had no significant effect on Iran’s exports to China in the commodity groups that account for a major share of total exports. However, for the commodity groups with a smaller share in exports, the impact has been negative. In the long run, exchange rate fluctuations have led to an increase in Iran’s imports in the commodity groups that constitute the main portion of China’s exports to Iran. Regarding short-run effects, the results show an increase in imports and a decrease in most export categories following exchange rate fluctuations. Overall, it can be concluded that exchange rate fluctuations do not create any advantage for Iran in its trade relations with China, either in the short run or the long run.

کلیدواژه ها:

ARDL model ، bilateral trade ، exchange rate fluctuations ، HS code