The Effect of Banking Industrial Facilities on Private Sector’s Investment in Industry and Mining(In All Provinces)

Abstract Dichotomy among different regions is a special characteristic of developing economies including Iranian economy. This dichotomy creates various problems, to remedy these problems, it calls for serious efforts to make harmony and balance among different regions. Due to shortages of capitals in under developed regions is resulted in vast amount of unused capacities. Therefore, it is suggested to enhance the level of investments by channeling financial resources to these regions. It is further identified that resource allocation ratio to gross domestic production compared even with other Middle East countries is very low. This low ratio is blamed for coexistence of inflationary and recessionary conditions. In this study, we try to determine factors which help to facilitate investment absorption in under developed regions. The developed and applied model is based on Wai and Wong model. This model has incorporated flexible acceleration pattern and their variable are adjusted from national level to provincial level. The hypothesis is tested for 28 provinces within 1998 -2004 by using pooled data. The results show that different provinces produce different impacts in investment