This research aims to analyze the effects of industrial agglomeration on regional economic growth in the Iranian provinces. For this aim, this study is divided into theoretical and applied sectors.

  In the theoretical point of view, the research has proposed a simple theoretical framework to study the impacts of industrial agglomeration on regional economic growth. In applied sector, we have specified econometrics models and estimated them by using a system of simultaneous equations using Panel Data for 28 provinces of Iran over the period 2000-2006.

  Results show that regional economic growth is positively affected by industrial agglomeration and regional knowledge level and negatively affected by human capital mobility cost and per capita income. Results also show that regional economic growth, transportation cost, household expenditure and human capital mobility cost have positive effects on industrial agglomeration in the Iranian provinces.