Effects of rail transportation costs and infrastructures on Iran-middle Asia commercial potentials: a gravity model approach

This paper analyzes impact of various factors related to the transportation sector as well as costs associated based on gravity model. The results of the estimated gravity model using panel data from 1992 to 2006 indicates that transportation costs, crystallized in the variable of distance among countries, have negative impact on trade between Iran and middle Asia countries. Also the effect of factors related to rail transport like long lines of rail network and the amount of load moved is relatively strong. With expanding transportation system and specially investment in rail transportation infrastructure as a clean, affordable, reliable and efficient tool, Iran is in a very specific geographic location to enjoy comparative advantage of the benefits of transit for middle Asia and increase export revenues and improve their strategic position in the region