Mohammadgholi Yousefi; Elahe Mohammadi Elahe Mohammadi
Volume 13, Issue 50 , October 2013, , Pages 1-15
Abstract
Taking into account the importance of manufacturing sector as an engine of growth of the economy, efforts have been made by policymakers to establish import-substituting and export-promoting industries. In this paper we have followed Chenery Model as modified by Kavoussi to estimate the relative importance ...
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Taking into account the importance of manufacturing sector as an engine of growth of the economy, efforts have been made by policymakers to establish import-substituting and export-promoting industries. In this paper we have followed Chenery Model as modified by Kavoussi to estimate the relative importance of import-substituting and export-promoting industries and the role played by domestic demand in the growth of manufacturing industries during 1375-88 (1996-2009). Our results show that while export-promotion played positive role in the growth of manufacturing industries, its relative share, however, has been insignificant. Import-substitution had negative effect on the growth of manufacturing sector, indicating that domestic production has been substituted by imports, thereby meaning that de-industrialization has taken place in Iran during this period. However, our results indicate that the main source of industrial growth in Iran was the demand expansion.
