Commercial Surveys

Commercial Surveys

Trade Capacity and Development Prospects in Relations between the Islamic Republic of Iran and Afghanistan: A Gravity Model Approach

Document Type : Original Article

Authors
Seyed Nezamuddin Makiyan 1
mohammad ghaffary fard 2
mahdi safdari 3
1 Professor, Department of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran.
2 Associate Professor, Department of Economics, Faculty of Economics & Management, Ahlul-bayt International University, Tehran, Iran.
3 , PhD Candicate, Department of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran.
10.22034/bs.2026.2078530.3188
Abstract
International trade is one of the main drivers of economic growth, playing a decisive role in enhancing productivity, developing productive capacities, and promoting regional cooperation. This study aims to analyze the actual and potential capacity of long-term economic and trade relations between Iran and Afghanistan, using the gravity model and the Fully Modified Ordinary Least Squares (FMOLS) method applied to time series data from 2000 to 2023. The results show that the GDP of Iran and Afghanistan, with positive coefficients of 0.62 and 0.84, respectively, have a statistically significant positive effect on bilateral trade volume, while geographical distance (negative coefficient of 0.077) and economic similarity (negative coefficient of 0.507) exert a negative effect on trade volume. Despite positive ties, including geographic proximity, border and customs infrastructure, and historical and cultural commonalities, the current level of economic relations between the two countries remains below their actual potential. Based on the findings, optimal utilization of existing capacities, removal of financial and banking barriers, development of transportation and logistics infrastructure, reduction of tariff and non-tariff barriers, and coordination of trade and regional policies can at least double the volume of bilateral trade and contribute to sustainable growth and regional economic convergence.
Keywords
Afghanistan / Gravity Model / Iran
Regional Convergence / Trade Capacity

Subjects

 
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Commercial Surveys
Volume 23, Issue 133 - Serial Number 133
September and October 2025
Pages 1-36

  • Receive Date 21 November 2025
  • Revise Date 30 December 2025
  • Accept Date 28 January 2026