The effect of industrial concentration on the convergence of Iranian tax revenues (spatial econometric approach)

Document Type : applicative

Authors

1 Department of Economics, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran.

2 Ph.D student of economic, Faculty of Economic and Management , Science and Research Branch, Tehran, Iran.

3 Assistant Professor of Economic, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran.

10.30473/jier.2026.78431.1550

Abstract

Industrial diversification resulting from endogenous growth of industry plays an important role in the sustainability of tax revenues and the use of the tax capacity of provinces due to the creation of broad tax bases. Therefore, the present study uses Iranian statistics to separate the provinces of Iran during the period 2011-2022 and uses a spatial econometric approach to examine the role of industry structure in the convergence of tax revenues of provinces. The results of the estimates show that there is a type of convergence of tax revenues in the provinces of Iran, and industrial share and industrial concentration have caused the convergence of tax revenues in the provinces of Iran. Evidence also shows that financial development and industrial concentration have caused a significant decrease in tax revenues, but the share of the provinces' industry and the interactive variable of industry share and concentration have caused an increase in tax revenues. In fact, the financing processes in the Iranian economy have not been high in terms of financing activities with high added value, and also the concentration of industry is an important factor in achieving sustainable tax revenues despite industrial economies of scale.

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History

  • Receive Date: 13 June 2026
  • Revise Date: 28 September 2026
  • Accept Date: 26 October 2026

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