Investigating the effect of Exchange Rate Fluctuations on Export of steel in Iran using Mixed Frequency Data Sampling Models (MIDAS)

Subject Areas : business management

Elham Eslahchi ¹ , Farideh Haghshenas Kashani ²

1 - Department of Business Management, Customs and Entrepreneurship, Central Tehran Branch, Islamic Azad University, Tehran, Iran
2 - Department of Business Management, Customs and Entrepreneurship, Central Tehran Branch, Islamic Azad University, Tehran, Iran

Received: 2023-09-23 Accepted : 2024-01-28 Published : 2024-12-06

Keywords: exchange rate, Exchange rate fluctuations, Steel Export, Midas Models,

Abstract :

Today, in Iran and all over the world, steel plays a crucial role in production and industrial sectors. Therefore, to increase and stabilize exports and eliminate the dependence of the country's budget on oil; adopting policies to diversify and expand the export of non-oil goods, especially the steel, by removing obstacles and adopting appropriate solutions in all developing countries with a single-product economy, including Iran, is inevitable.The purpose of this article is investigating the effect of exchange rate fluctuations on export of steel accordingly in MIDAS modeling framework. this model makes it possible to review former steel export forecasts and revise them regarding the impact of exchange rate fluctuations on steel industry exports, if more reliable data is available. In the estimated Midas model, annual statistics of steel exports, steel production, real and uncertain production, exchange rate, monthly variables of exchange rate and sanctions index are utilized during from 1992 until 2021. The results show that there is a positive relationship between the exchange rate and steel exports, and the relationship between exchange rate fluctuations and steel exports is negative, therefore these effects are more intense in the long term.

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