The Effect of Trade Liberalization on the Food-industries’ Revenue (A Case Study of Tomato-Paste in Iran)

Document Type : Research Paper

Authors

• Seyed Ehsan Zohoori ¹
• Amir Mohamadinejad ²
• Reza Moghadasi ³

¹ Ph.D. Graduate, Department of Agricultural Economics, Extension and Education, Science and Research Branch, Islamic Azad University, Tehran, Iran.

² Assistant Professor, Department of Agricultural Economics, Extension and Education, Science and Research Branch, Islamic Azad University, Tehran, Iran .

³ Associate Professor, Department of Agricultural Economics, Extension and Education, Science and Research Branch, Islamic Azad University, Tehran, Iran.

10.30495/jae.2022.23586.2107

Abstract

Introduction: Small and medium companies may allocate themselves a significant share of value added; food industry products especially tomato paste in accordance with the production per capita and climate conditions of Iran are considered as such. Owing to the globalization development, the strategies of relieving from tariff and non-tariff barriers increase the exporters’ shares in the competitive market.
Materials and Methods: To investigate the effective factors, particularly the ad-valorem tariff on the share of tomato-paste exporters, a panel data was used with 192 cross-sections, including major exporting factories and importing countries in a gravity model during 2005-13.
Findings: Results of the Generalized Linear Model estimations indicated the positive effect of productivity, number of trade documents, religion, and being an Asian country, as well as the negative effect of tariff and distance to the importing country on the revenue share of Iranian tomato-paste exporting companies.
Conclusion: The most important suggestions is to be WTO membership, preferring to export to special trade partners with aseptic packages and to apply preferential tariffs via negotiations. In case of non-tariff factors, it is recommended that international banking functions should be facilitated by relieving the economic sanctions, focusing on Asian markets due to the comparative advantages, updating equipment, determining the geographic position of factories, and educating the labor.

Keywords

• Ad-Valorem ‌Tariff
• Tomato-Paste
• Revenue Share

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