Measuring the Relative Advantage of Economic Activities in the Provinces of Iran: Location Quotient Approach

In the discussion of regional economy and considering the Scarcity of resources and facilities available, understanding the economic characteristics and advantages of each province enables better planning for the achievement of development goals. Realizing national development requires recognizing the economic benefits of different regions of the country. The purpose of this article is to identify the relative advantage of the economic subdivisions of the provinces during the years 2005-2015. The instrument is a measurement of the basic economy model and the location quotient (LQ) calculated using data from the regional accounts of the Central Bank of Iran and the Statistics Center of Iran for 30 provinces. The location quotient indicate the relative importance of an activity in the region relative to the relative importance of the same activity in the national economy and has been used by researchers in economic geography and regional economics. Surveys in this article show that agriculture, hunting and forestry, building, education, health and social assistance, hotels and restaurants have a recognized advantage in most provinces. Whereas the economic activities of industry, water and electricity, gas, transportation and public administration in most of the provinces have lost their advantage, often fishing, mining and financial intermediaries in the provinces have no advantage. Surveys also show that in terms of value-added share of total productions of the country, the services sector is at the first place with 51.7 percent, industry sector is at the second place with 38.7 percent and agriculture sector is at the third place with 9.6 percent. The results of the location quotient method show that according to the fifteen subdivisions, the priority activities in each province. Therefore, it is necessary for national and regional planners to make decisions regarding investment, resource allocation and budget adjustment in order to lead to economic growth in the country.
Keywords: regional economic, relative advantage, location quotient, economic sectors.