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Assessment of export market diversification impacts on Iran's GDP and total export: (the Toda Yamamoto causality tests).


Undoubtedly, foreign trade is one of effective pars of the economy of every country which has been the focus of attention of many economists for a long time. Relying on the policy of positive balance of trade, the followers of capitalism have considerably emphasized the development of export. Classical and neo-classical economists like Adam Smith and Alfred Marshal underlined the trade as the means of developing domestic market, work division, increasing efficiency and productivity. Even classics have recognized it as the engine of economic growth. Therefore, the policy of export development as one of the important economic strategies has been the focus of attention for a long time. After 1980s, considerable changes in technology lead to the rapid growth of international trade. Krugman et al. [27] believe that the studies that have investigated the main reasons of this increase in trade have focused on two important factors i.e. technological changes and political factors. Accordingly, with the rapid technological growth, the production and transportation costs decrease, the time span of the transfer of goods and services reduces which are done more effectively too. They added common borders to the mentioned factors. Nowadays, regional unities and cooperation is like a small experience of economic liberalization which is the working agenda of many countries. This has increased both regional and international trade [5].

In addition to significant changes in international trade, it is observed that there is high attention to the effects of foreign trade and economic growth. A considerable part of the literature of this domain emphasizes on the existence of positive relationship between export and economic growth and increase of economic well-fare. In contrast, the immiserizing growth model presented by Bhagwati indicates that as export increases, the domestic economic well-fare reduces. Therefore, numerous studies have tried to test the mentioned theories. In a considerable part of this literature, export is one of the important determining variables of economic growth. In addition to emphasizing the type and quality of exported goods, the highly important role of more value-added goods and products of stable industries is emphasized, and the effect of the export of these goods on positive economic growth is investigated. Therefore, in order to create the exogenous effects of economy, increase domestic productivity and maintain and fix export incomes, it is necessary that while more value-added goods are produced and exported, single-production is avoided and variety is taken into account. Studies like Fosu [8], Giles et al. [20], Xu [34], Sachs and Warner, Herzer et al. [23] and Peneder [31] have investigated the combination of exporting goods.

In addition to the above-mentioned factors, variety in the target countries of export is another important and effective factor which stabilizes export incomes, and influences directly total export and gross domestic income. If a country has trade relations with a few countries and export goods to them, there is concentration in the export markets of these countries. In other words, there isn't variety of target countries for his export. Therefore, concentration in export can overshadow total export and gross domestic product and reversely affect them.

Although other factors can also explain volatility of production, it seems that there is a significant relationship between concentration of export and variety of production. This should be investigated in developing countries like Iran who want to release themselves from petroleum economy. The statistics of Iran's exporting items from 2005 to first half of 2012 indicates that there is an alternative increase and reduction in the total amount of exported goods in all years. The data of export destinations also indicate that there were 121 destination countries in 1992 which increasingly grew annually and reached 161 countries in 2001. From 2001 like exporting goods it indicated an alternatively descending and ascending order which is shown in table 1 and 2.

In recent years, limited foreign studies investigate the simultaneous relationship among variety of export, variety in export markets and economic growth. However, domestic studies investigated the relationship between export and economic growth. Although just a few studies examined verification of export, the number of export destinations and their probable effect are not taken into account. Therefore, this study has for the first time investigated the simultaneous relationship among variety in export markets, export and gross domestic product. Nowadays, trade and particularly export and finding new trade partners and developing export markets are of considerable importance in economic circles, and ignoring them bears negative consequences. Statistics indicate that Iran's share of world trade is low. In our country, export of petroleum allocates major share of export, and non-petroleum export has a minor share. As the price of petroleum is internationally determined and countries cannot separately influence its price, the necessity of paying more attention to non-petroleum export, verification, and finding new target markets becomes more evident and indicates the necessity of doing this research.

Firstly, the introduction is presented. Then, the theoretical principles and review of literature of this study are dealt with. In third and fourth section analysis model of this study, the data and methodology are provided. The fifth section presents research findings and finally the conclusion is provided.

2. Theoretical Principles and Review of Literature:

The relationship between export and economic growth is of particular importance in the literature of growth and economic development. However, there are considerable discussions in theory which have brought up numerous questions. Questions like "Is the growth of export the engine of economic development or is the export the result of economic growth? Is there a simultaneous relationship between export and economic growth?" are the starting point for different studies [12].

Although Adam Smith and Ricardo state theoretically the relationship between export and economic growth for the first time, testing this relationship has been the focus of attention from 1970s and early 1980s.

Regarding the relationship between economic growth and export, three hypotheses can be distinguished from each other. Export-led growth (ELG) hypothesis refers to the fact that capital and work force alone cannot lead to economic growth of a country, and export is one the main factors of economic growth. The expression that "export is the engine of growth" is interpreted from this viewpoint. It must be pointed out that opponents of this theory consider the most effect of export on economic growth the positive auxiliary effects of export on domestic economy not export incomes. Many economists including Grussman and Hillman believe that export growth influences directly GDP growth through linkage effects, foreign exchange revenues and its auxiliary positive effects on domestic economy. This phenomenon is the export-led growth hypothesis which is verified generally with the development of time-series econometric methods.

However, the hypothesis of growth-led export is also put forward for countries which are at the early stages of development. According to this theory, human asset, work force skills, accumulation of capital along with simplification of affairs as the result of technology development enable countries to achieve a threshold level beyond which comparative advantage becomes prominent and the required context is provided for the export growth of countries. The hypothesis of bidirectional causality emphasizes the long-term and bidirectional relationship between export and economic growth. During the last fifty years, four methods have been employed to test the relationship between export and economic growth. In 1960s and 1970s the studies simply calculated the correlation coefficients. In 1980s the regressions and fitting neo-classical production function were used. In 1980s Granger causality technique was calculated. From the early years of 21st century cointegration technique and vector error correction model have been used [13].

Among the literature of the effects of export on economic growth the problem of instability of export incomes is a new subject which has taken the attention of some researchers to the variety of production and target markets. This has provided the proper context for investigating the effects of these factors on economic growth.

Instability of export incomes has created some unwanted problems in economy. Grilamont [21] and Dave [18] believe that instability of export profits reduces productivity of production sector and finally reduces national savings. MacBean [29] and Maizels [3] point out that as these problems occur, financial provision of required capital goods that lead to economic growth encounter problems and sometimes become limited too. Reduction of investment levels and export growth are other problems which were put forward by Kenenand Voivodas [25] and Glezakos [19].

Hesse [24] claims that volatility of export revenues of goods and services exporting companies reduces investment of these companies and investment risks in macro-economic level increase and long-term economic growth is negatively influenced. Therefore, exporting companies and enterprises have no option but producing various goods and finding new customers. He also claims that verification of export provides the opportunity to utilize learning opportunities which are a modern way of comparative advantage. According to modern theories of endogenous growth, in order to make long-term economic growth permanent, verification of goods and markets in one particular sector or industry changes other sectors and industries and contributes considerably to the improvement of technology, conveyance and development of knowledge of the country.

Verification of production and development of export markets to make economic growth permanent is important from the viewpoint of economic macro-planning which is one of effective and positive trade policies and selecting it has considerable effects. In addition to protecting country from unwanted trade shocks to terms of trade, verification of export increases positive effects of terms of trade and provides the situation for increasing output of economies of scale. Verification of export can be enforced in three ways:

* Selling products of newer markets (geographic verification of present products)

* Increasing the present export by adding agricultural products

* Utilizing comparative advantages to develop export of services

Enforcing each of these methods requires following one of export-oriented and competitive strategies which takes modern world order of economy into account.

Among the researches which emphasize the verification of production, studies of Depinres and Ferrantino, Al-Marhoubi [1], Lederman and Maloney [28], United Nations, Herzerand Nowak-Lehmann [23], Hesse [24] are of particular importance. However, just few studies have investigated the effect of geographic verification on export and economic growth. Kingston [26] is the first person who has studied this effect. He selected 31 developing countries and gathered the related data to geographic concentration of export, export growth and export earnings of 1954-1967. Then, he calculated simple correlation coefficient of these variables. Hirschman index was used to calculate the country's concentration in export. The results indicate that there is a significantly positive relationship among these variables which verify the related theory. This was forgotten for a long time, but the development of econometric methods and increasing importance of economy took the attention of some researchers from 1995 and numerous studies were carried out in this regard.

In a study for transition economies, Havrylyshyn and Al-Atrash [22] investigated the relationship between openness level of economy and trade unity and studied geographic verification of trade after transition with a gravity model. The results indicate that geographic verification of countries which are close to European Union and experience more economic reforms was greater. Accordingly, they suggest to countries close to European Union to obtain export growth through increasing the rate of economic reforms and country verification.

Al-Marhubi [1] selected 91 developed and developing countries for his study. Using the data of 1961-1988, he concluded that in many exporting countries instability of export revenues is the main source of economic instability. This instability can reduce the rate of net investments and economic growth.

Balabanis [17] selected 135 intermediate goods exporting companies in England. He gathered the required data through questionnaire, and investigated the effect of geographic verification and type of goods on export, sale and profit-making of companies. The results indicate that verification of goods significantly influences the companies' sale stability. In contrast, geographic verification of export has no significant effect on sale.

Bacchetta et al. [16] claim that foreign sources are the main reasons of verification of domestic products. They focus mainly on market concentration and production. Calculating Herfindahl index for developed and developing countries and using Panel Data method, they concluded that verification of export considerably influences fluctuations of export revenues. As countries become wealthier, these effects reduce and show a descending order. From the viewpoint of developing countries, verification of products can protect them from negative effects of trade shocks and lead to domestic stability. Although the positive effects of verification of exporting goods have reduced in developing countries, variety in export markets plays a determining role in variability of domestic products.

Choosing some developing and developed countries for 1990-2005, Amorgo et al. [2] investigate the effects of concentration on production and geographical region on export. This study was carried out intensively and extensively. They defined intensive share of export as the growth of current exporting goods to the present trade partners. Similarly, the extensive share of export was defined as the ratio of exporting goods to new countries (new partners). A part of this study done with a Tobit regression model indicates that for the specified developing countries the effect of geographic verification is more than verification of goods. Therefore, instead of producing new goods, finding new markets has a more significant effect on export growth.

Arip et al. [4] use the data for 1980-2007 of Malaysia with cointegration model and Granger causality test. They tried to investigate the relationship between verification of exporting products and economic growth of this country. The findings indicate that verification of exporting goods has a positive effect on economic growth of this country. Therefore, following an export-oriented strategy can produce more stability of export revenues.

Reviewing the results of domestic literature indicates that the simultaneous relationship between geographical and goods variety and Gross Domestic Products has not been investigated so far. However, a few existing studies have mainly examined the relationship between geographical variety and economic growth. Some of them are mentioned hereafter.

Using the data of 1959-1992, Mirshojaei carried out a study for OPEC countries. He investigated the relationship between export instability and economic growth in Iran. The results indicate that concentration index was descending before 1973, and ascending after it. The calculations illustrate that concentration of agriculture was higher in early years of Islamic Revolution. However, by encouraging industrial development policies, the ascending trend of agricultural concentration gradually reduced. The final result of this study is that concentration on goods is the main reason of export instabilities of country.

Taghi pour and Mousavi [14] investigated the effect of non-petroleum variety on foreign currency revenues of 1979-1999. They employed several criteria to determine the variety level of exporting goods groups. After calculating stationarity and cointegration of variables through a regression model using ordinary least squares (OLS), the results were interpreted. The research findings indicate that export variety increases foreign exchange revenues. Therefore, enforcing policies which lead to the production and export of industrial goods can increase foreign exchange revenues.

Tofighi [15] investigated the relationship between economic growth and technical export in Iran's economy for two different long-term (1338-1999) and short-term (1994-1999) periods using VAR models. The results indicate that the effect of non-petroleum and technical export on economic growth is significantly positive for both periods.

Samadi [12] studied the combination structure of non-petroleum export and the effect of verification of export on economic growth in 1968-1998 with OLS method. The findings show that although the verification of export is high, no short-term or medium-term structural change occurred in non-petroleum export. In addition, exporting industries had a relatively similar trend of export growth. However, verification of exports has stimulated Iran's economic growth.

Eslamloueian and Khodadi [7] carried out a study to examine the effect of verification of export on net index of terms of trade and income terms of trade of industrial export and non-petroleum export. The results indicate that net trend of terms of trade of industrial export, first-material export and agricultural export and total non-petroleum export was decreasing in long-term. When the verification of export is more, decreasing trend of the net of terms of trade of industrial and non-petroleum export is less. This implies the positive effect of verification on the net of terms of trade in Iran.

Mahdavi and Javadi studied the causal relationship between foreign trade and economic growth. Iran's data were tested with Granger and Hoshyao models. The findings prove bi-directional relationship between the growth of import and economic growth without petroleum.

Armen, Izadi and Hassan poor in a study named "the triangle of financial development, economic growth and foreign trade" investigated the interactive causal relationships among these three important economic variables. This study used auto-regressive models with distribution lags. In order to find out the long-term relationship among these variables Toda and Yamamoto causality test was employed. The results of these causal models verify the export-led growth hypothesis in Iran. In addition, the unidirectional causal relationship from financial development to import in long term is proved.

Memarnejad et al. studied the effect of export variety on economic growth of post-revolutionary Iran. They considered Iran's exporting items in three different indexes to investigate export combination with econometric methods and OLS. They concluded that the combination of non-petroleum export possessed high variety which leads to economic growth, and verification of export and economic growth moved in one direction.

Shakeri and Maleki [13] investigated the long-term relationship between export growth and economic growth with industrial activities in separation. They used seasonal data. Cointegratin techniques, error correction model and Gouiki and Salemi causality test were employed. The results of this study indicate that in analyzing non-petroleum export effectiveness on country's economy we cannot judge definitely about general effectiveness or ineffectiveness because there is no stable long-term relationship between economic growth and some subsectors like forestry, extraction of coal, food and drinking products and wood products. These models affirm the export-led growth for some subsectors like publication, Xerox and printing, chemical products and industries, plastic products and other mineral and non-metal materials.

Azarbayjani et al. [5] studied the effect of export verification on total productivity of economic growth and production factors in countries of D-8 group. Referring to new theories of growth and international trade and econometric method based on panel data, they investigated the effect of export verification on productivity and economic growth. The results show the significantly positive effect of verification of export on total productivity of factors and economic growth. The researchers suggested at the end that these countries including Iran take into account verification of export besides other effective factors on total productivity to obtain sustainable development and growth.

3. Development of Hypotheses and Conceptual Model of Research:

Theoretical framework of the relationship between variables was presented in previous sections. Here, we try to find out simply the cause-effect relationship among variables which are Gross Domestic Product, variety of exporting markets and total export by presenting an adequate model. In addition, we want to discover the correspondence or otherwise of our country with the available hypotheses. Therefore, the model is limited to these three variables. According to the structure of test and multi-variability of the present study, vector autoregressive model (VAR) is the best model for it whose methodology is presented afterwards. The objective of this study is to find out the response to the following questions:

H1: Does the GDP lead to export growth and exporting markets variety?

H2: Is the exporting markets variety the reason of increase of total export and GDP?

H3: Is there a bidirectional causal relationship among the mentioned variables?

4. Methodology:

The main objective of this study was to investigate the effect of exporting markets variety on export and domestic production in 1991-2011. Numerous studies in Iran studied the effect of verification of export on economic growth. However, the effect of verification of exporting markets and its possible relationship with export and GDP was not taken into account. Therefore, this study tries to bridge this gap and measure the causal relationship among the mentioned variables.

Regression models basically calculate the correlation or the relationship between variables, but do not necessarily determine the direction of correlation or the existence of cause-effect relationship. Causality tests are new methodologies which can eliminate this shortcoming. There are different methods to determine causal relationship in economic studies like Granger causality standard, Seimz test, Granger-Hsiao test, Toda and Yamamoto causality test, error correction model, etc.

If we suppose that x is a four-component vector ([X.sup.*] = Y.X.K.L) so that Y, X, K, L are a static set with the least covariance, a four variable VAR model is specified [10]:


Where [[empty set].sub.ij](L) = [[summation].sup.mij.sub.1=1]. L and mij is the polynomials grade of [[empty set].sub.ij] (L). Lis the delay operator where [L.sup.k][w.sub.t] = [w.sub.t-k], [[empty set].sub.i], (i = 1,2,3'4) are the constants of the model, and [a.sub.t], ([a.sub.1t], [a.sub.2t], [a.sub.3t], [a.sub.4t]) is a vector with zero mean and matrix of variance and covariance is:

[[delta].sub.ts] = 1 iF ft = s

[[delta].sub.ts] = 0 iF ft = s

Where F ([a.sub.t][a.sub.s]) = [[delta].sub.ts][summation]]

Therefore, the simultaneous correlation among variables is reflected in (1) model error expressions. However, the reliability of variables must be calculated before the application of this model. After investigating the reliability of variables, cointegration tests must be used to determine the existence of long-term relationship among variables. If this relationship is verified, Granger causality test will not be useful anymore.

The results of Granger causality test are very sensitive to lag length. If the selected lag length is less than real lag length, removing appropriate delays produces an oblique. If the length of selected lag is more than the length of real lag, excess lags of model make the estimations ineffective. Seems test like Granger test is very sensitive to the selection of lag length and different lag lengths bring about different results. As a scientific rule, we should insert lag in model as much as residue sentences do not have auto-correlation problem. In this test, as additional amounts of variable will be inserted in vector, the degree of freedom reduces too. Therefore, selection of the number of lags is very important in these methods [6].

In econometric texts several methods like Hsiao and Toda and Yamamoto [33]are recommended to overcome these problems. Toda and Yamamoto is a causality test based on VAR. In this model, first the optimum lags of VAR model (K) and then maximum durability degree (D max) are determined, and a vector self-explanatory model with (K + D max) lags is created. The process of lag selection is valid when K [greater than or equal to] D. This method has several advantages. Toda and Yamamoto [33] claim that their method has the following characteristics:

* Test method is very simple and doesn't have many weak points of other econometric methods.

* As it uses Modified Wald test (MWALD), it has a comparable performance in size and ability in comparison with LR and WALD tests.

* There is no need to examine cointegrative characteristics among variables. Even if inserted variables in model have the same root, it is possible to estimate variables in the inserted level in model.

5. Data Analysis:

Export and GDP variables with fixed prices of 1997 for 1992-2010 were obtained from financial reports of Central Bank. In order to calculate national variety which indicates variety of exporting markets annual reports of Iran custom house were made use of. All variables are considered logarithmic.

In experimental studies several methods and indexes are used to calculate the index of goods variety or the variety of export destinations. Entropy index is used to determine national variety. We use this index because the proper characteristic of this index is its ability to determine integration and convergence level in world trade [32]. This index is:

ENT = [[summation].sup.N.sub.i=1]Rij * Ln (1/Rij) (2)

In this equation Rij is the share of country i export to country j. according to this relationship if the entropy index increases, the variety of exporting markets has increased. In other words, it indicates the increase in convergence level and trade and economic cooperation. The smaller index shows concentration in exporting markets.

The results of investigating the stationarity of variables (unit root) indicate that all variables are not at the stable level. First rank difference of variables shows that these variables have become reliable in the first differentiating. Therefore, their maximum order of integration equals to one (dmax = 1).

In order to determine the number of appropriate lags in estimating models based on Johansen-Juselius model and Akaike information criterion (AIC) and Hannan-Quinn information criterion (HQ) 3 (K=3) was determined. Therefore, the rank of VAR is 4 (k + D max VAR = 4). The results of Stationarity test and determination of appropriate lag are presented in table (3) and table (4).

In order to determine the relationship between the variables, VAR (K+D max) model was calculated first. Then, K number of estimated indexes was examined in model by MWALD and their causality was judged. The VAR model of this study can be presented as an algebraic matrix by VAR (k + D max = 4):


In this model our variables are logarithm of GDP (LGDP), logarithm of export (LEX) and logarithm of entropy index (LENT) which show domestic variety. It is estimated by seemingly unrelated regression (SUR). Therefore, in conducting causality test from domestic variety (LENT) to GDP (LGDP) according to I(1) variables, VAR model is first calculated with SUR method. Then, null hypothesis {LENT is not the cause of LGD} is calculated with Schmitt MWALD which has chi-square asymptotic distribution with n and r degree of freedom. If the null hypothesis is rejected, the opposite hypothesis is rejected. This can be done for other causes.

Basically, in Granger causality test, long-term and cointegrartion relationship among variables must be calculated. As data of cointegtaion characteristics of system are not necessary in Toda and Yamamoto test, we use Granger method to investigate the causality relationship among variables in the system which is introduced in (3) relationship. The results of this test according to Schmitt MWALD statistic is presented in table (5).

The results indicate that just the null hypothesis that says {LENT is not the cause of LEX} is verified (LENT [??] LEX), other null hypotheses are rejected and their opposite hypotheses are verified. Therefore, there is a bidirectional causal relationship between Gross Domestic Product (LGDP) and exporting markets variety (LGDP [left right arrow] LENT). Similarly, there is a bidirectional causal relationship between Gross Domestic Product (LGDP) and export (LGDP [left right arrow] LEX). However, there is a unidirectional causal relationship among export (LEX) and domestic variety (LENT) which is from export to exporting markets variety (LEX [right arrow] LENT).

According to the results of this study, the export-led growth hypothesis in Iran's economy is proved like studies of Mahdavi and Javadi, Armen et al. [3], Shakeri and Maleki [13] and Heidarian and Saghaeian [10]. The important point of this study which is not considered in previous studies in Iran is the causal relationship between variety of export markets and Gross Domestic Product and export. The results affirm the bidirectional causal relationship between variety of export markets (domestic variety) and increase in Gross Domestic product. However, the unidirectional causal relationship from export to domestic variety is verified. The graphic representation of table 5 and according to significant levels of rejecting null hypothesis is presented in diagram 1.

6. Discussion and Conclusion:

The studies in Iran's economy indicate that there has been considerable attention to foreign trade, variety of exporting goods and economic growth. In the contrary, limited studies investigated the variety of exporting markets and its effects. The cause-effect relationship among export, GDP and variety of exporting markets in Iran has not been investigated. Therefore, this study tries to bridge this gap.

The trend of exporting markets, export and GDP was investigated first. A three-variable VAR model was considered .Then, a modified version of the Granger causality test that proposed by Toda and Yamamoto [33] is applied for testing the bilateral causality between this variables for 1991-2010 periods in Iran.

The obtained results of this study are compatible with theoretical principles of research and some domestic and foreign studies. The results indicate that there is a bilateral relationship among GDP, export variables and variety of exporting markets and GDP variables. While the theory of export-led growth is implicitly verified, the significance of increasing trade partners and exporting markets is revealed. Therefore, the variety of exporting markets and trade partners can develop bilateral relations, reduce the effects of foreign trade shocks and prevent the reduction of GDP. However, the unidirectional causal relationship from export to domestic variety indicates that if export increases, finding new markets becomes possible and concentration of export to limited countries will be prevented. Therefore, the general conclusion of this study is that Iran can expand of exporting markets variety and increases self GDP and export. As economic growth of Iran is linked to export, the economics policy makers of Iran should lay greater emphasis on export mobilizing industries and exporting markets variety for more development.


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PhD. Student of Economics, Faculty of Economics and Administrative Sciences, Hacettepe University, Beytepe Campus 06800 Cankaya/Ankara, Turkey

Received his PhD. of Economics in 2013 at DokuzEylul University, Faculty of Economics and Administrative Sciences, Izmir, Turkey

Corresponding Author

Nasser NASIRI, PhD. Student of Economics, Faculty of Economics and Administrative Sciences, Hacettepe University, Beytepe Campus 06800 Qankaya/Ankara, Turkey


Table 1: Number of Iran's Exporting Items of

year          2005   2006   2007   2008

Number of     3341   3553   3511   3235

year          2009   2010   2011   First 6
                                   of 2012

Number of     3327   3372   3337   2769

Source: Export Development Organization, Senior Managers' Report, 2011

Table 2: Number of Iran's Export Destinations of 1992-2011

year             1992   1993   1994   1995   1996   1997   1998

Number of        112    103    115    126    126    136    149

year             1999   2000   2001   2002   2003   2004   2005

Number of        150    152    161    154    156    152    143

year             2006   2007   2008   2009   2010   2011

Number of        155    166    173    166    163    160

Source: Precise Measurements Based on Data of Iran's House of Custom

Table 3: Augmented Dickey-Fuller (ADF) Unit Root for Stationarity
of Variables

Variable   intercept   Trend   Dicky and Fuller   Critical Value
                               statistic          at 5%

LENT       *           --      -3.438             -3.041
LEX        *           --      -4.312             -3.041
LGDP       *           --      -3.206             -3.045

Variable   Number of Lags   Convergence

LENT       1                I(1)
LEX        1                I(1)
LGDP       1                I(1)

Source: Research Findings

Table 4: Johansen-Juselius Test for Determining Cointegration Optimal

Lag   AIC       HQ

0     12.58     12.57
1     17.82     17.79
2     17.63     17.57
3     * 18.47   * 18.40

Source: Research Findings

Table 5: Results of Toda Yamamoto Causality Test

Dependent   Effective   Null hypothesis   p-Value   MWALD Value
variable    Variable

LENT        LEX         LEX [??] LENT     0.086     8.219
            LGDP        LGDP [??] LENT    0.071     6.93
LEX         LENT        LENT [??] LEX     0.286     2.502
            LGDP        LGDP [??] LEX     0.001     8.362
LGDP        LENT        LENT [??] LGDP    0.041     6.53
            LEX         LEX [??] LGDP     0.089     6.78

Dependent   Effective   Conclusion
variable    Variable

LENT        LEX         LEX [right arrow] LENT
            LGDP        LGDP [right arrow] LENT
LEX         LENT        LENT [right arrow] LEX
            LGDP        LGDP [right arrow] LEX
LGDP        LENT        LENT [right arrow] LGDP
            LEX         LEX [right arrow] LGDP

Source: Research Findings
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Title Annotation:Original Article
Author:Nasiri, Nasser; Asl, Saeid Haji Hassani
Publication:Advances in Environmental Biology
Article Type:Report
Geographic Code:7IRAN
Date:Aug 1, 2013
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