Farhad Khodadad Kashi; Mohammadnabi Shahekitash
Volume 17, Issue 51 , July 2012, , Pages 21-42
Abstract
This paper aims to examine the relationship between the structural and performance variables in 140 Iranian industries, besides investigating structure of industrial markets according to the Four-firm concentration ratio plus cost advantage ratio (CDR). Then the study estimates efficiency level of the ...
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This paper aims to examine the relationship between the structural and performance variables in 140 Iranian industries, besides investigating structure of industrial markets according to the Four-firm concentration ratio plus cost advantage ratio (CDR). Then the study estimates efficiency level of the industries under the stochastic frontier technique in 4 digits ISIC code so that finally the relationship between the structure and performance based on the SCP pattern has been examined through the estimated efficiency level. Additionally, we applied the bootstrap approach in order to have more precise judgment on the gained results. The findings indicate that firstly the industries with high concentration intensity are more inefficient, in other words there is an adverse relationship between the monopoly power and efficiency in Iranian industries which obviously imply that Unlike the Chicago notion, here the monopoly power does not originate from the efficiency, and we shall look for other possible reasons pertaining to this phenomena. Secondly, the industries with more intensity of entry barrier are more inefficient, it means that the role of entry barrier due to lack of competition is of significance in creating the inefficiency in the industrial sector. Thirdly, those industries which have more shares of governmental activities compared to private sector indicate lower efficiency. Which mean that there is a negative relationship between the government presence and efficiency of industrial activities.
