Investigating the Impact of Regional Disparities and Locality‑Specific Variables on Transportation Infrastructure Development in Iran: A Spatial Panel Analysis

Abstract

Transportation infrastructure is one of the main drivers of regional integration and economic development, yet its development is unevenly distributed regionally. The research addresses the significant knowledge gap concerning the interdependence of regional economic factors and space dependencies that influence transportation infrastructure development, with particular reference to Iran. While the literature acknowledges the importance of determinants like GDP, unemployment, and investment, it typically overlooks the spatial spillover effects and sophisticated regional interactions that affect infrastructural development. To bridge this gap, it employs a spatial panel data methodology, estimating Iranian provincial data for the years 2011–2020. In so doing, it can account for both the impact of local economic conditions and the impact of neighboring provinces on transportation infrastructural development. The findings indicate that increase in the gross domestic product of a province and reductions in its unemployment rate are positively associated with improvement in its transport infrastructure. However, it also uncover some evidence of spatial competition: increased per capita production in a province has a negative impact on the transport infrastructure of neighboring provinces. It highlights the necessity to incorporate regional competition and spatial externalities into transport infrastructure planning and investment. These results offer valuable insights for policymakers seeking to get the highest returns on infrastructure spending and balanced regional development in Iran.