Digital Economy and the Path of Innovation: Linking Technology, Digital Development, and the Quality of Economic Growth in Iranian Metropolises

Document Type : applicative

Authors

Department of Economics, Shi.C., Islamic Azad University, Shiraz, Iran

10.30473/jier.2026.75511.1509

Abstract

This study examines the impact of the digital economy on technological innovation and economic growth in six Iranian metropolises (Tehran, Mashhad, Isfahan, Tabriz, Shiraz, and Karaj) from 2016 to 2023. Using panel data analysis, multivariate regression, and structural equation modeling, the results reveal that the digital economy—with an impact coefficient of 0.42—is the strongest driver of technological innovation. A 1% increase in the digital economy index boosts the Green Growth Index (GGI) by 0.08 points.Tehran, scoring 8.1 in the digital economy index, hosts 42% of startups and 35% of patents nationwide. However, a significant digital divide exists among cities, with a 114% gap between Tehran and Karaj. Traditional industries, with a negative impact coefficient of 0.25, hinder green growth.Digital transformation fosters sustainable economic growth through innovation, productivity, and job creation. To reduce regional disparities, policymakers should prioritize basic digital infrastructure, education reform, and tax incentives for digital industries. Achieving 8% economic growth in Iran requires accelerating digitalization, with future research needed to assess external influencing factors.

Keywords

References

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Journal of Industrial Economics researches
Volume 9, Issue 32
December 2025
Pages 115-128

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History

  • Receive Date: 18 August 2025
  • Revise Date: 24 November 2025
  • Accept Date: 31 August 2025

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