Investigating The Establishment of Regional-Trade arrangement Between Iran and Neighboring Countries (With Land and Water Border)

Abstract: In the recent era, interdependence among countries is an inevitable reality and a growing phenomenon. The countries' commercial affairs affect economic and non-economic enterprises of neighbors and even those of distant countries. So for the peaceful coexistence, international sustainable development and tackling some international challenges, governments are compelled to adopt some decisions and reactions in order to develop trade flows. In this regard, the countries around the world have a growing willingness to make economic -commercial arrangements and the regional orientations of trade. The presence of developing countries in different region-oriented classifications can be assumed as a reassuring hatch to enter less experienced economies of international competition atmosphere into global market so as to be adjusted with economy globalization. If Iran economy aims at following globalization, it must firstly strengthen regional contracts along with an active diplomacy and then join global commercial organization so that it can be able to benefit the available privileges and advantages in such exhibitions. Otherwise, entering global exhibitions, which increasingly becomes more and more privileged and impenetrable, won't be possible. Therefore, this article mainly aims at examining the impact of the constitution of a big regional contract including Iran all its neighbors, which have land or water confines with Iran, on bilateral commercial relationship. The fundamental assumption of this article is that such kind of economic cooperation can increase bilateral commercial transactions for union members. The present study, which is an empirical research, is an analysis in which to answer the main question, experimental investigation of the model is done by using the econometric models and then the results are analyzed. So, a model of commercial gravity which can evaluate bilateral commercial flows by applying influential economic and non-economic factors for both trade partners such as characteristics of economy structure, level of political and cultural relationships, languages, religion, human development indexes, geographical distance and also the integration factor by which countries are unified as a regional union, is used. For this purpose, panel data method is used. In this research, 72 trading partners of Iran (Postscript No. 1) from 2000 to 2010 were studied. In this paper, two scenarios were investigated and each of them could offer considerable and efficient results. The results gained from F-Tests of Lamer, Haman and the method of fixed effects, more than other evaluating methods, offer more suitable and efficient findings when individual effects related to each of trade partners were considered. Such data show that economic integration can increase the volume of bilateral commercial flows between Iran and other member states