Mohamad Nabi Shahiki Tash; Farhad Khodad Kashi; Ali Norouzi
Volume 19, Issue 59 , July 2014, , Pages 39-71
Abstract
In this study the market structure of industrial sector has been evaluated based on the index of economies of scale, Herfindahl – Hirschman concentration index, and Lerner concentration index. Also, the relationship among profitability index and indexes of concentration ratio and economies of scale ...
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In this study the market structure of industrial sector has been evaluated based on the index of economies of scale, Herfindahl – Hirschman concentration index, and Lerner concentration index. Also, the relationship among profitability index and indexes of concentration ratio and economies of scale has been examined. Data used include the information of input and output of the components of cost function, market share of industries, number of firms, and the output price related to 23 industries of ISIC 2-digit code for the period 1996-2009. The result of evaluation of concentration ratio based on the Lerner and Herfindahl indexes indicates that the concentration level has declined during the period under study, while the industry sector has been away from competitive situation. In addition, the elasticity of cost with respect to output is less than unit for all of the industries implying the existence of economies of scale for 23 industries. The most important finding of this study is that the profitability index of industry sector is less than 50% and equal to 38% and the Lerner index and economies of scale are able to explain 52% of variations in profitability index of whole industry. Also, the Lerner index has relative superiority in the explanation of profitability index compared with Herfindahl – Hirschman concentration index.
Firooz Falahi; Majid Feshari; Siab Mamipour
Volume 15, Issue 45 , February 2011, , Pages 49-75
Abstract
This paper focuses on the relationship among structure, conduct, and performance (SCP) for a sample of 141 four-digit industries during 1999-2005 in Iran. For this purpose seemingly unrelated regression estimation (SURE) method is used to estimate the parameters of the models for profitability (the ratio ...
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This paper focuses on the relationship among structure, conduct, and performance (SCP) for a sample of 141 four-digit industries during 1999-2005 in Iran. For this purpose seemingly unrelated regression estimation (SURE) method is used to estimate the parameters of the models for profitability (the ratio of profit to sale), concentration (the inverse of the number of firms in industry), and advertising.
Results show that profitability is determined by advertising, which in turn, is affected by profitability. In addition, there are positive relationships among advertising, research and development expenditure, concentration, growth rate of industries’ sale, ratio of investment to sale, and profitability.
