Identifying Investment Priorities of Industry Sector in Line with Creating a Free Trade Zone in Bushehr Province

Identifying the comparative advantage of economic activities in different areas, especially in the free trade zones, makes it possible for local and foreign investors to allocate resources optimally. Therefore, given the importance of the industry in the expansion of non-oil exports in Iran, this study has tried to, using the Location Quotient and Domestic Resource Cost Indexes beside factor analysis and numerical taxonomy techniques, identify investment priorities of industry sector in line with creating a free trade zone in Bushehr province in the years of 2005, 2007, 2009 and 2010. The results indicate that, the province in 2005 has comparative advantage in the construction activities of other non-metallic mineral products. But in 2007 comparative advantage has not been seen in any of the activities. According to the industry experts view this occurred due to the economic downturn in Iran, and shows the importance of macroeconomic variables in the regional economic functions.