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Paper Information

Journal:   IRANIAN JOURNAL OF APPLIED ECONOMICS   fall 2017 , Volume 7 , Number 22 #r00450; Page(s) 1 To 10.

The Impact of Import Share on Domestic Prices: A Case Study of Iranian Petrochemical Industry

Author(s):  KAZEROONI ALIREZA, farzi nasrin*
* Tabriz University
Exchange rate as one of the key variables in the economy, has important effects on macroeconomic variables such as import and export price index, and it is important in policy-making. The main objective of this paper is to determine the effectiveness of the degree of the exchange rate transfer on the petrochemical products’ price relative to their share of imports from other countries. This paper is a study with a microeconomic approach about the effect of the exchange rate transfer in imperfect competition market. Therefore, this study attempts to investigate a non-competitive behavior of exporter petroleum products firms to Iran and as a result, the role of imperfect competition in the transfer of the exchange rate changes’ effect on the petrochemical industry is estimated by using ARDL model, over the period of 1983 to 2014. The findings show that there is a negative significant relationship between the market share and the degree of the exchange rate transfer on domestic prices; in other words, it decreases by increasing the share of imports.
Keyword(s): Market Share,Exchange Rate Transfer,Iran Economy,Petrochemical Industries
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