The main goal of this paper is to study the relationship between trust and trade between Iran and its selected trade partners during 2001-12 through econometric methods and by means of panel data approach. First, trust and trade are defined and then, the concept of transaction cost and its details are studied. Some of the previous similar researches about trust are reviewed in the third part. Next, statistical population and the research data are specified after presentation of theoretical bases and model specification. Finally, hypotheses of the model are presented and then the model is estimated and discussed. In the end, there is a conclusion delineating that formal trust has no effect on trade between Iran and its partners while informal trust has a negative effect on the mentioned trade.

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