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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.17 No.3 pp.623-631

Investigating the Asymmetric Prices and the Role of Technology and Environmental Constraints in the Oil Demand Function of the Iran Oil Importing Countries

Reza Darisavi Bahmanshir*, Mahdi Khodaparast Mashhadi, Ali Akbar Naji Meidani, Narges Salehnia
Economics, International Campus, Ferdowsi University of Mashhad, Iran
Economics Department, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran
* Corresponding Author, E-mail:


The present study seeks to investigate the oil demand function reversibility of the Iran oil importing countries, taking into account the effect of technology and environmental constraints on the demand of the mentioned countries. In order to reach this goal, the present study evaluated two symmetrical and asymmetric adjustments for oil demand of Iran oil importing countries using data of 1970-2014 period for Iran oil importing countries including France, Germany, Greece, Italy, Japan, Poland, Spain, Turkey, the United Kingdom, South Korea, Czech Republic, the Netherlands and Belgium, Russia, South Africa, China and India. As there was a co-integrated relationship among the variables of mentioned crosssections, Fully Modified Ordinary Least Squares (FMOLS) method of Panel data approach was applied. According to the results of this research, the oil price increase has a negative and significant effect and GDP has a positive and significant effect on the Iran oil importing countries in symmetric and asymmetric models. Through the application of FMOLS cointegrated panel data approach, oil demand of Iran oil importing countries is irreversible. Moreover, R&D as the technology indicator and lag of CO2 as environmental constraints have a significant effect. In one hand, ignoring environmental considerations and pollution increasing in the mentioned countries will decrease the oil demand of Iran and on the other hand, technology indicator and applying modern ones will decrease the oil demand of Iran, too. According to the irreversibility for oil demand of Iran oil importing countries and Iran dependency on oil revenues, it should be attentive in selecting oil importing countries for sustainable source of revenue. The importance of environmental considerations and technological improvements of oil importing countries will be impressive for energy policy makers.





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