The Moderating Role of Digital Economy Infrastructure on the Relationship between Human Development and Urban-Rural Income Gap in Iran

Document Type : Research Article

Authors

Assistant Professor, Department of Economics, Faculty of Management, Economics and Accounting, University of Hormozgan, Bandar Abbas, Iran

10.22034/jepr.2026.145929.1363

Abstract

This study aims to investigate the moderating role of digital economy infrastructure on the relationship between human development and the urban-rural income gap in Iran. Given the spatial-regional nature of provincial data and the presence of spillover effects between provinces, a spatial econometric approach has been employed. To this end, data from 31 provinces of Iran for the period 2011–2024 (14 years) were collected and estimated using the Spatial Durbin Model (SDM). The findings reveal that: (1) human development has a significant negative correlation on the urban-rural income gap (-0.325); (2) digital economy infrastructure directly reduces the income gap (-0.184); (3) more importantly, the interactive effect of human development and digital economy is positive and significant (0.142), indicating the moderating role of the digital economy; this means that in provinces with stronger digital infrastructure, the reducing observed negative correlation of human development on the income gap is weakened (a substitution effect rather than a complementary effect); (4) spatial spillover effects are significant and show that improvements in human development and digital infrastructure in one province also have a positive spillover effect on reducing the income gap in neighboring provinces. Based on the findings, policy recommendations include balanced investment in human development and digital infrastructure, attention to regional spillover effects, and the design of complementary spatial policies.

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Articles in Press, Accepted Manuscript
Available Online from 30 July 2026
  • Receive Date: 22 May 2026
  • Revise Date: 18 July 2026
  • Accept Date: 30 July 2026
  • Publish Date: 30 July 2026