Spatial drivers of firm entry in Iran

Abstract

Given the importance of entry promotion to prompt economic growth and promote structural transformation, this paper investigates the regional determinants of firm entry in the 30 Iranian regions, considering four different sizes—micro, small, medium, and large—over 2000–2015. Using a new and unique database, we estimate different spatial econometric models, which take into account three types of spatial interaction effects. We find that firm entry is related to some regional characteristics, but the relationship is not homogeneous across firms of different size. We also find that most types of firms are influenced by the negative effect of economic sanctions during the sample period.