Mechanism and Measurement of the Effects of Industrial Agglomeration on Economic Resilience in Iranian Provinces

This study investigates the impact of industrial agglomeration on the economic resilience of Iran’s provinces using the Generalized Method of Moments (GMM). The results indicate that industrial agglomeration has a positive and significant effect on enhancing economic resilience. This effect is realized through improving employment conditions, profitability, and competitiveness of firms, as well as through adaptation and learning mechanisms. Additionally, social services contribute to reducing production costs and increasing economic resilience, although their effect is not statistically significant at the 5% level. Industrial production efficiency has been identified as a key factor in strengthening economic resilience, as it can reduce transaction costs through common infrastructure and technological spillovers, while reinforcing innovation and specialization. Furthermore, market size has a positive and significant effect on the economic resilience of provinces, and its expansion helps to reduce the costs of accessing markets and raw materials. Based on the findings, policy recommendations include strengthening industrial agglomeration, enhancing social services, improving production efficiency, expanding market size, and considering industrial diversity. Implementing these recommendations can help boost the regions’ economic resilience and reduce their vulnerability to crises.