Analysis of the Effect of Energy Price Volatility on the Export Competitiveness of Iranian Industries

Abstract

The present study aimed to analyze the effect of energy price volatility on the export competitiveness of Iranian industries and to examine the mediating roles of production cost pressure and pricing flexibility in this relationship. The study was conducted using an applied, quantitative, descriptive-correlational design with a structural equation modeling approach. The statistical population consisted of managers, export specialists, financial experts, production supervisors, and strategic planning professionals working in export-oriented industrial firms located in Tehran. Using purposive sampling and inclusion criteria related to professional experience and familiarity with export activities, 312 participants were selected as the final sample. Data were collected using a researcher-developed questionnaire and a secondary-data checklist related to energy prices, industrial costs, and export indicators. The questionnaire assessed energy price volatility, production cost pressure, pricing flexibility, export competitiveness, export market stability, and vulnerability to external shocks using a five-point Likert scale. Content validity was confirmed by experts in industrial economics and international trade, while reliability was verified through Cronbach’s alpha coefficients above 0.70. Data analysis was performed using SPSS-27 and AMOS software through descriptive statistics, Pearson correlation analysis, multiple regression analysis, confirmatory factor analysis, and structural equation modeling. The findings indicated that energy price volatility had a significant negative relationship with export competitiveness (r = -0.68, p < 0.01) and pricing flexibility (r = -0.52, p < 0.01), while showing a significant positive relationship with production cost pressure (r = 0.71, p < 0.01) and vulnerability to external shocks (r = 0.77, p < 0.01). Multiple regression analysis demonstrated that energy price volatility significantly predicted export competitiveness (β = -0.39, p < 0.001). Structural equation modeling further confirmed that energy price volatility exerted both direct and indirect negative effects on export competitiveness through increased production cost pressure and reduced pricing flexibility. The final structural model demonstrated acceptable fit indices (CFI = 0.94, RMSEA = 0.067, SRMR = 0.049), confirming the adequacy of the proposed conceptual framework. The results demonstrated that instability in energy prices significantly weakens the export competitiveness of Iranian industries by increasing production costs, reducing strategic pricing flexibility, and intensifying firms’ vulnerability to external economic shocks. Sustainable industrial competitiveness therefore requires coordinated energy, industrial, and trade policies aimed at improving energy efficiency, reducing dependence on volatile energy inputs, strengthening operational flexibility, and enhancing firms’ resilience in international markets.