Investigation Industrial Convergence in Iranian Provinces: Spatial Econometrics Approach (SDM)

The aim of present study is to identify the convergence of productivity in the provinces of Iran from 2007 and 2010. In order to evaluate, the researcher used the absolute and conditional beta convergence. With respect to the importance of the neighborhood effect in the study, the spatial economy method is used. The result shows that the absolute beta convergence has been approved and this coefficient has the numerical value 0.12.Thiscoefficientisstatistically significant. The conditional convergence coefficient is equal to 0.24, and the coefficient is statistically significant at the 1% level. The control variables in the conditional convergence included industrial diversification, industrial evenness, access to interstate road infrastructure, human capital. Industrial diversification and level of education have negative effect, and industrial evenness positive and access to the road infrastructure have positive effect on productivity convergence. Based on the results of the study it can be suggested that policy- makers and economic planners take more attention to the evenness industry based on the potential of each region.