Comparative Advantage

Given the growing importance of foreign trade, especially for Iran, as well as the importance of the Commonwealth of Independent States (CIS) , the main purpose of this study is to examine Iran's trade potential with the CIS during the time period 2014-2018. In this regard, by using Allen and Drysdale indices, we have firstly examined Iran's trade similarity with CIS countries. Then, the competitiveness has been evaluated by calculating RCA and Lafay indicators. Finally, based on RCA, Lafay and total trade potential criteria, Iran's trade potential with CIS countries has been measured. According to the study, Iran's trade potential with the CIS region varies between $ 19 billion and $ 30 billion during the time period, and Iran has used only less than 10 percent of its existing trade potential with this region. During the period, Iran has a comparative advantage in more than 400 commoditiy groups, and according to the RCA index, the most important competitive commodity groups are generally primary goods, based on natural resources, agriculture and oil. Also, according to the Lafay Index for 2018, Iran has about 500 commodity groups with a positive index, and there is a significant balance in favor of this group of commodities. Given some significant capacities and advantages over the CIS, Iran should develop its trade with this region, taking into account national interests.

The new structural economics approach to industrial policy is to follow a strategy of comparative advantage. According to this thinking, determining the relative prices of production factors by the market mechanism and providing the soft and hard infrastructure required by the government for industries that are compatible with the production factor’s structure, are the two determining factors of industrial development strategy. Considering that one of the key hypotheses of this approach is to increase economic growth as a result of comparative advantage following policy, this study has tried to test this hypothesis in the provinces of Iran in the period of 2005-2017 using the GMM. The findings of this study show that the hypothesis is confirmed at the level of Iranian provinces; Also, the change in the model estimation method did not change the research findings, so it is reliable. Therefore, it is recommended that policy makers consider the policy of following the comparative advantage of the region in designing the industrial development strategy.

The broiler chicken industry is a vital agricultural subsector in Kurdistan Province, Iran, with 716 production units in the province and a 5% growth from 2019 to 2024. However, there is no study to evaluate the comparative advantage indices or competitive capacity of broiler chicken production in Kurdistan Province. This study aims to assess these factors using the Policy Analysis Matrix (PAM) for 2023. Findings indicate that Kurdistan Province has a comparative advantage in broiler chicken production, as shown by the Domestic Resource Cost (DRC) ratio and Social Benefit-Cost Ratio (SBCR), across all production capacities. The Nominal Protection Coefficient (NPC) for the product reveals that the market price of live broiler chicken is lower than its shadow price, effectively imposing indirect taxation on producers. Conversely, the NPC for inputs shows that input shadow prices exceed market prices, suggesting indirect subsidies for poultry inputs. The Effective Protection Coefficient (EPC), which combines these effects, indicates effective government support for the industry. Competitiveness indices suggest that broiler chicken production in Kurdistan Province is viable both domestically and internationally. The findings suggest that the broiler chicken industry of Kurdistan could compete in regional markets, particularly Iraq market, even without supportive policies in form of input subsidies, provided price suppression is eliminated and market-based pricing is implemented. Thereby, this study suggested transitioning from interventionist policies to establishing a transparent and competitive market infrastructure to ensure sustainable growth in broiler chicken production.