This paper examines the possibility of spatial spillover effects of transport infrastructure in Iran provinces. We estimate the regional spillovers of the transport infrastructure stock by applying a spatial Durbin model from 1980-2015. The results indicate that positive spillover effect exist due to the connectivity characteristic of transport infrastructure at the national level. A spatial Durbin model that obtains spatial dependence in a given province has a positive direct effects on agricultural output. Also, at the national level, the spillover effect of road infrastructure on elasticity of output in neighboring provinces varies with respect to the spatial weight matrix used in the spatial Durbin model. Moreover, our analysis shows that enhancement in road infrastructure in the provinces, south region shows a larger positive spillover effect on agricultural output when compared to central or west provinces. At the regional level, transport infrastructure spillover effects change significantly all the time among Iran’s five macro-regions.

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