Threshold Effects of Provincial Export-Destination Diversity on Income Inequality in Iran
Subject Areas : Economic
mohammadnabi saadipour
1
*
,
hasan farazmand
2
,
Behrouz Sadeghi Amroabadi
3
,
Ali shariatNajade
4
1 - Ph.D. in Economics, Faculty of Economics, Shahid Chamran University of Ahvaz, Ahvaz, Iran
2 - Professor, Faculty of Economics, Shahid Chamran University of Ahvaz, Ahvaz, Iran
3 - Assistant Professor, Faculty of Economics, Shahid Chamran University of Ahvaz, Ahvaz, Iran.
4 - Associate Professor, Faculty of Management and Economics, Lorestan University, Lorestan, Iran
Keywords: Export-destination diversity, income inequality, threshold effects, PSTR.,
Abstract :
This study examines the threshold effects of provincial export-destination diversity on income inequality across Iranian provinces using the Panel Smooth Transition Regression (PSTR) model. Income inequality has been one of the major challenges facing Iran’s economy in recent decades, and the structure and quality of exports can play an important role in shaping it. To this end, provincial panel data for 2002–2022 (Iranian calendar years 1381–1401) are used. The export-destination diversity index is calculated using the method of Zou et al. and detailed customs data, while the Gini coefficient is used as the measure of income inequality. The test results confirm a nonlinear, threshold relationship between export-destination diversity and income inequality. Before the estimated threshold is crossed, greater export-destination diversity may intensify income inequality; after the threshold is crossed, however, the effect of this variable changes significantly toward reducing inequality. These findings indicate that reaching a certain level of diversity and complexity in export destinations is a necessary condition for provinces to benefit from the positive distributional effects of exports. The results may inform policies aimed at export development and reducing income inequality across Iranian provinces.
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Translated Resource
1. Saghib, Hassan. "Identifying the Contexts for Diversifying Industrial Product Exports: Application of the Economic Complexity and Product Space Approach," Journal of Industrial Economics Research 4, no. 12 (2020): 35-56.
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