Volume 13, Issue 4 (2014)
QJER 2014, 13(4): 1-25 |
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Khodadad Kashi F, Zarra Nezhad M, Yousefi Hajiabad R. The Effect of Market Structure on Innovation and R&D in Iran’s Manufacturing Sector. QJER 2014; 13 (4) :1-25
URL: http://ecor.modares.ac.ir/article-18-11639-en.html
URL: http://ecor.modares.ac.ir/article-18-11639-en.html
1- Associate Professor of Economics, Payam Noor University ( E-mail: khodadad@pnu.ac.ir)
2- Professor of Economics, Shahid Chamran University, Ahvaz, (E-mail: zarram@gmail.com)
3- Assistant Professor of Economics, Payam Noor University (E-mail: Reza.yossefi@gmail.com)
2- Professor of Economics, Shahid Chamran University, Ahvaz, (E-mail: zarram@gmail.com)
3- Assistant Professor of Economics, Payam Noor University (E-mail: Reza.yossefi@gmail.com)
Abstract: (9203 Views)
The main purpose of this paper is to investigate the effect of market structure on innovation and R&D in Iran’s manufacturing sector. To do this, first, statistical data for Iran’s manufacturing sector has been gathered in International Standard Industrial Classification (ISIC) format, then mutual effects of concentration, innovation and R&D, advertising and profitability in different industrial activities have been analyzed using simultaneous equations system and Error Component Tow Stage Least Squares (EC2SLS) during 1996-2007. The results show that industrial concentration has a significant and inverted U-shaped relationship with innovation and R&D. In addition, R&D expenditure declines with increases in profitability. The investigation of the factors affecting manufacturing structure indicates that although innovation and R&D has no effect on manufacturing structure, but profitability and performance of top firms affect their concentration. Our findings exhibit the ineffectiveness of concentration and innovational behavior on industries performance; whereas increasing market concentration results in advertising expenses and innovational behavior of firms raises advertising expenses. Similarly, the lagged and accumulated effects of R&D confirm the existence of an inverted U-shaped relationship between concentration and R&D
Keywords: market structure, competition, Behavior, Market performance, Research and Development, Concentration, Profitability, efficiency, Advertising, Manufacturing Sector, Simultaneous Equation System, Error Component Tow Stage Least Squares
Received: 2012/01/9 | Accepted: 2012/09/12 | Published: 2014/01/11
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