This study is devoted to examine the performance of
Iranian Manufactured exports in terms of their destination over the 1980-2006
period. Using time series techniques, an export demand model is applied
and the income and price elasticities of demand for Iranian manufactured
exports by country of destination are estimated. As after 1979, Iranian
trading partners were diversified in the direction of more inter-LDCs.
The applied export demand model is then simulated by the Newton technique.
As it is assumed that trade flows respond to changes in relative prices
and exchange rate, the magnitude of the response will then be investigated
through a historical simulation. The empirical results demonstrate that
trading partner`s income, real effective exchange rate along with commodity
price do affect the Irans manufactured export demand. The findings of
the historical simulation also suggest that, the size of changes in the
endogenous variables is relatively smaller under the first Scenario, whereas
the second policy Scenario causes exports to rise significantly. The estimation
outcomes also emphasize the sensitivity of exports to a devaluation of
domestic currency especially to LDCs.