Spatial clustering of industrial agglomeration and regional energy efficiency

This paper uses the spatial Bayesian model from 5 regions from 2000 to 2018 to evaluate the spatial panel and hierarchical clustering of regional energy efficiency (EE) in Iran. These findings demonstrate the role of spatial patterns between regional energy efficiency and industrial agglomeration. This has influenced the spatial distribution and energy efficiency performance of Iran’s industries. The empirical findings demonstrate that, based on regional specifications, the administration needs to strategically guide industrial organization to establish within the designated clustering zones. Spatial analyses suggest that industrial agglomeration can enhance regional energy efficiency (EE), although there are noticeable disparities at the regional level. In the eastern region, transportation infrastructure and urbanization positively influence energy efficiency. Findings show that in the central and southern regions, industrial agglomeration has a beneficial effect on boosting EE. In contrast, its effects are less noticeable in the eastern and western regions. Consequently, the industrial agglomeration across the 30 provinces demonstrates a significant spatial correlation with EE. This offers valuable insights for governments when formulating regional industrial policies.