Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī (Sep 2013)
A Quantitative Estimation of the Sources of Industrial Growth in Manufacturing Industries of Iran
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 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.
