Investigating the Factors Affecting the Export of Handmade Carpets in Iran: A Nonlinear Distributed Lag Technique (NARDL)

The present study examines the nonlinear dynamic relation among the factors affecting the export of Iran handmade carpets between 1352- 95, and focuses on the macroeconomic variables. For this purpose, the Nonlinear Autoregressive Distributed Lag (NARDL) Technique is used. The results indicate that there is a nonlinear short-run and long-run relation among the variables of the model. Among the variables, two variables of carpet prices and world income have both asymmetric effects on handmade carpet exports in the short-run and long-run. In the other words, the positive and negative changes in the price of handmade carpet, both in the short run and long run have different effects on export of handmade carpets. In the case of the world income, the effects of positive and negative shocks are significant and have the expected signs in the short run. In the long run, the negative shock of world income has also the expected sign and is significant. In the long run, the positive world income shock, although has the expected sign, but it is not significant. Furthermore, according to the theory, increasing the production of the handmade carpets and the real exchange rate has the expected effect and are significant. Finally, the rate of adjustment of the model from short-run to long-run equilibrium is about 0.72. In the other words, the amount of error correction and decreasing of deviation from long-run equilibrium in each period is about 0.75.