Research and development (R&D) is widely recognized as a key determinant of productivity growth, productive capacity, and economic performance. However, the extent to which R&D contributes to output depends not only on R&D expenditure but also on the availability of specialized human capital and the economy’s capacity to absorb, process, and utilize knowledge. This study examines the role of R&D activities and human capital in explaining differences in gross domestic product (GDP) across Iranian provinces. Using provincial-level data, we analyze the relationship between GDP and a set of factors including labor, capital, R&D expenditure, and personnel employed in R&D activities. The empirical framework specifies GDP as a function of physical capital, labor, R&D expenditure, and R&D employment. To assess the role of human capital, we incorporate an interaction between R&D activities and highly educated labor. We also account for differences between border and non-border provinces, a distinction that helps capture regional disparities associated with geographic location and market access. The findings indicate that labor and capital have positive and statistically significant relationships with GDP. R&D expenditure also has a positive and significant association with output. Moreover, the interaction terms between R&D activities and highly educated labor are positive and significant, suggesting that educated human capital plays a complementary role in strengthening the link between R&D and production. These findings provide useful policy implications for regional development and innovation planning. Overall, the results highlight the importance of simultaneously expanding R&D activities and developing specialized human capital to enhance the productive capacity of Iranian provinces.