This paper explores the empirical evidence of the nature of intra-metropolitan supply linkages and industrial clustering and searches for the driving forces that enhances the learning processes and innovation capacities hence; contributing to competitive advantage within the Tehran metropolitan. The research points to accelerating growth in the automotive sector since the late 1980s and early 1990s which has been the driving force of the Tehran’s economy. This growth appears to be related to industrial clustering and systemic linkages with actors such as suppliers, sub-contractors and so on. The analysis of empirical evidences from the sample industrial cluster indicates a considerable number of interesting findings from strong degrees of industrial clustering. However, there are some weak evidences of industrial clustering such as weak institutional environment in the cluster.

Keywords: Competitive advantage, Learning, Industrial clustering, Innovation

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