Threshold Analysis of the Effects of Government Integration and the Entrepreneurial Ecosystem on the Added Value of Small and Medium-Sized Industries in Iran

Document Type : Research Paper

Authors

1 Ph.D. student in Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.

2 Associate Professor, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran

3 Assistant Professor of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.

Abstract

In developing countries, small and medium industries play a fundamental role in achieving sustainable development goals through reducing poverty, promoting innovation, strengthening industrialization and reducing income inequality. In the meantime, the entrepreneurial ecosystem by increasing capabilities and access to market research, as well as improving the ability of these industries to use skilled experts, has a special importance in the process of empowering this group of industries. The main goal of this article is to analyze the effect of the health of the entrepreneurial ecosystem on the added value of small and medium industries in Iran, emphasizing the integrity of the government during the period of 2014:2- 2021: 2. For this purpose, the smooth transition regression (STR) method was used. The results indicated that the integrity of the government is the variable of the transfer function of the added value of small and medium industries, which has a threshold limit equal to 0.551 percent and the speed of transfer from the first regime to the second regime was equal to 15.93. so, the integrity of the government (which is a reduction of corruption) and the tax burden in the first regime have a negative effect and in the second regime a positive effect (U-shaped effect) on the added value of small and medium industries. The health of the entrepreneurial ecosystem, economic complexity (as a technology indicator), investment and the number of employees in both regimes have a positive effect on the added value of small and medium industries. The mentioned results show the improving effects of increasing the integrity of the government in the way the variables used in the research affect the added value of small and medium industries, which shows the need to fight and control corruption in order to increase the integrity of the government.

Keywords

Innovation Economic Ecosystem Studies
Volume 5, Issue 3
July 2026
Pages 53-71

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