Iranian Journal of Economic Research

Estimating the Parameters of Inter-industry Variability Function of Profit Margins and Evaluating the Degree of Concentration in the Iranian Manufacturing Industries Based on the U-Davies Approach

Authors

Mohammad Nabi Shahiki Tash
Ali Norouzi
Abstract
The objective of this paper is to estimate and analyze market power and degree of concentration in Iran's Manufacturing industries. The paper employs Inter-industry Variability function of profit margin approach and U-Davies in order to evaluate degree of industrial concentration. The finding indicates that elasticity of inequality distribution for market share in the industries is less than 0.5 and therefore it is understood that the market share of the industry is almost sensitive relative to the new entry firms. The results also demonstrate that the average value of the U-Davies concentration index for the manufacturing industries is 0.038, so that the manufacturing of tobacco products with 0.616 and manufacturing of plastic products along with manufacturing of other non-metallic mineral products have had the highest and lowest levels of concentration index respectively. 

Keywords

concentration
U Davies
Elasticity of Size Distribution
Translog Cost Function

  • Receive Date 28 April 2015
  • First Publish Date 28 April 2015

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