Investigating Factors Impacting on Export Performance and Market Share of Petrochemical Companies in Iran: A Case Study of Persian Gulf Petrochemical Industries Company (PGPIC)

Abstract The global petrochemical industry is described as capital-intensive and deeply cyclical mainly caused by local and global economic cycles. Export performance and market share are key indicators of petrochemical industry competitiveness. There by, recognizing comparative advantages leading to competitive advantage is a key point to minimize economic cycle’s implications for petrochemical companies. To do so, the paper applies a partial-adjustment dynamic panel data model and estimates two export performance and market share equations separately using generalized method of moments (GMM) method over the time period 2004 to 2016. The empirical results show that energy costs, return on sales, and labor productivity are the most important factors impacting Persian Gulf Petrochemical Industries Company (PGPIC)’s market share. Energy costs influences market share negatively and return on sales and labor productivity have a positive effect on market share of the company. Also, depreciation, return on sales, and labor productivity are the most influential variables on PGPIC’s export performance which have positive impacts on the company export. The results indicate that improving both market share and export performance factors has led the company to gain more competitive position than its competitors in regional and international markets.JEL Classification: D40, L11, D20, J24