Examination of Income Convergence among Iranian Provinces: Panel Data Approach

Document Type : مقالات پژوهشی

Authors

• shahram fattahi ¹
• Khalil Attar ²

¹ Economics,Faculty of Social Sciences ,Razi University of Kermanshah

² Razi University of Kermanshah

https://doi.org/10.22067/erd.v22i9.35246

Abstract

Confirmation of convergence hypothesis among provinces, its role in removing divergence among regions and achieving regional convergence is one of the important issues in macroeconomics. The aim of the present study is to examine absolute and conditional income convergence hypotheses among Iranian provinces during the period 2000-2010 using panel data. The hypotheses are tested for the whole provinces, ten- province group with high per capita income, ten- province group with middle per capita income, and ten- province group with low per capita income. The results indicated that the both hypotheses of absolute and conditional income convergence in the whole provinces and the all groups are confirmed. To examine the conditional convergence, the explanatory variables the number of employed people, the index of capital stock, and the degree of industrialization were used, implying that the variable degree of industrialization is statistically significant in whole provinces and ten- province group with high per capita income.

Keywords

• Convergence Hypothesis
• Absolute Convergence
• Conditional Convergence
• Iranian Provinces

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