Doctoral Dissertations

Jafar Alavi

Date of Award

3-1986

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Economics

Major Professor

William E. Cole

Committee Members

Henry Herzog, George Spiva, Gary Dicer

Abstract

This dissertation is an ex-post study of Iran's non-oil export performance. More specifically, this is a study of the commodity and market pattern of the Iranian non-oil exports during three seperate five—year periods. The technique used to analize the non—oil export performance is Constant Market Share (CMS) model which was first used in international trade by Tyzynski in 1951. The underlying assumption of the CMS model is that, the country's share of total export of each commodity to each market remains constant over the period under study. It is because of this assumption that this study uses short periods of time (five-year) to utilize the CMS model.

The CMS model is a mathematical technique which is used for decomposing the change in export over time into four different components: (1) world demand effect, (2) commodity composition effect, (3) market distribution effect, and (4) competitiveness effect. It is then based on the sign and the size of each one of these four "effects" that one is able to judge a country's export performance compared to the "rest of the world." For example, if the commodity composition effect is positive for a particular period then it is said that the country concentrated on commodities for which demand grew faster than the "average." It should be reminded, however, that since the model is an equality it can not be used for forecasting purposes.

The results of the CMS analyses indicate that despite the emphasis by the planners on reducing Iran's dependency on oil revenues, Iran has become ever more dependent on the oil sector. However, during the Fourth Development Plan period (1968-72) non-oil exports grew more than any other plan period before and after. The results of CMS analyses for this period indicate that this growth was mostly possible due to the improved commodity composition and market distribution. On the other hand, non-oil exports during the Fifth Development Plan (1973-77) grew slower than any other period before, and this is shown to be due mostly to Iran's inability to compete with other countries (i.e., less developed countries).

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