Does Market Potential Matter? Evidence on the Impact of Market Potential on Economic Growth in Iranian Provinces

Zahra Dehghan Shabani (), Ali Hussein Samadi () and Amene Zare ()
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Zahra Dehghan Shabani: Department of Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.
Ali Hussein Samadi: Department of Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.
Amene Zare: Department of Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.

Iranian Economic Review (IER), 2017, vol. 21, issue 4, 847-863

Abstract: The market potential is an indicator showing the level of market access and national demand for products of a region. The aim of this study is to study the effect of market potential on regional economic growth in 28 Iranian provinces over the years 2001–2011. In order to do that, a model of regional growth was estimated by using Spatial Dynamic Panel Data technique. This technique allows us to control for endogeneity biases. Based on the findings, the market potential has a significant positive impact on economic growth of Iranian provinces. This means that as the regional market of products gets bigger, it will experience a higher economic growth.

Keywords: Market Potential; Regional Economic Growth; New Economic Geography Model; Spatial Dynamic Panel Data. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:21:y:2017:i:4:p:847

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