The coefficient of the product of country i (Iran) GDP multiply by country j (Iran 's trade partner) GDP, as the most appropriate economic variable that determines the economic size of countries, is in accordance with theoretical expectations which is positive and at statistical confidence level of 95 percent is significant and equal to 0.88 percent. This means that a one percent increase in GDP of Iran or country j, bilateral trade volume will increase by 0.88 percent. Since the GDP is known as economic capacity, economic size and economic strength of an economic system are, therefore, an increase in this variable will increase country 's ability to produce more. It will lead to an increase in supply and demand for trade between two countries. In other words, larger countries with higher production capacity will be more capable of boosting their production level, in order to have a comparative advantage in terms of economic scale and consequently increase their exports. They also will have stronger domestic, national markets which demand more imports and thus an increase in GDP of the two countries will increase their volume of
The coefficient of the product of country i (Iran) GDP multiply by country j (Iran 's trade partner) GDP, as the most appropriate economic variable that determines the economic size of countries, is in accordance with theoretical expectations which is positive and at statistical confidence level of 95 percent is significant and equal to 0.88 percent. This means that a one percent increase in GDP of Iran or country j, bilateral trade volume will increase by 0.88 percent. Since the GDP is known as economic capacity, economic size and economic strength of an economic system are, therefore, an increase in this variable will increase country 's ability to produce more. It will lead to an increase in supply and demand for trade between two countries. In other words, larger countries with higher production capacity will be more capable of boosting their production level, in order to have a comparative advantage in terms of economic scale and consequently increase their exports. They also will have stronger domestic, national markets which demand more imports and thus an increase in GDP of the two countries will increase their volume of