Analyzing the Effect of Real Exchange Rate on Petrochemicals Exporting

The export of petrochemical products -as a type of non-oil export- plays a key role in the economic development of our country. This is of special importance in light of the structure of Iran's economy that is oil-based. Identifying the factors affecting the export of petrochemical products can improve their export. Using Johansen-Juselius co-integration method and the error correction model, the present study purports to investigate the effects of the real foreign exchange rate and the total value of petrochemical products on the export of these products in Iran. This research used data from 1989 to 2012. It was found that the real foreign exchange rate and the real value of total petrochemical products positively affect their export in the long run, and the effect of the former is greater than that of the latter. However, in the short run the effect of the foreign exchange rate on the export of petrochemical products is more significant.