Impacts of Knowledge-based economy on trade integration between Islamic countries; Extrovert approach of resistive economy

Author

Assistant professor of economics, Kharazmi University

Abstract

       General policies of Iran’s resistive economy have been promulgated based on flexible, opportunistic, productive, endogenous, leading and extrovert approaches in order to improve economic strength, to finally achieve goals of Iran Vision 2025. The promotion of a knowledge-based economy and strengthening extrovert economy are two important factors in resistive economy.
        In this article, an effort has been made to evaluate the impact of knowledge based economy on regional integration and enhancing bilateral trade as the index of extroverteconomy among the selected Islamic countries by using the Gravity Model. According to this aim, theoretical principles of economic and regional integration and the gravity model were used for the assessment of the effects of environmental readiness of knowledge based economy on regional integration and strengthening extroversion among selected Islamic countries, and the gravity model was evaluated for OIC member countries, as well. Besides the positive impacts of GDP variables and population of quest and host countries as parameters indicative of economic and market size of these countries and also negative impact of distance variable on the mutual trade of selected muslim countries which all confirm the integration theory and gravity theoretical principles, the results show that synthesis index of knowledge based economy, according to theoretical expectation, brings about significant effect on bilateral trade of OIC memebr countries and approves this assumption that the effectiveness of knowledge based economy has decisive impact on the promotion of mutual trade among OIC member countries.
            As improvement of each unit of economic indicators of knowledge based economy in host country adds about $ 5/51 million to bilateral trade among the pre-mentioned countries. This fact reveals the necessity for institutional and structural reforms in the development of knowledge based economy and promotion of cooperations between the countries of the region.

Keywords


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