An Evaluation of Monopoly Power of Manufacturing Sector in Iran

Document Type: Original Article

Authors

1 Professor of Economics, Payam Noor University, Tehran ,Iran

2 Assistant Professor of Economics, Payam Noor University ,Tehran ,Iran.

3 PhD Student, Payam Noor, Tehran, Iran

10.30466/iies.2020.51367.1012

Abstract

This paper investigates the market structure in the manufacturing sector of Iran from 1995 to 2013. There are a number of competition measures that can be calculated. Due to the limited scope of this study, we employ a non-structural measure of competition, namely the Panzar-Rosse H-statistic. This is a widely used measure of competition which has a relatively modest data demand. As a complement, we have also calculated the value of two structural competitions indices: CR4 and HHI. The results obtained from the Panzar-Rosse test indicated a monopolistically competitive market structure for the manufacturing sector in Iran. On the other hand, the results obtained from HHI and CR4 showed a high level of concentration in Iranian industries with a decreasing trend and a high level of market concentration. Thus, half of the industries in Iran utilize effective monopoly structure. However, in general, the decline in concentration trend indicates that the monopoly reduced during the study.

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