Determining Investment Priorities Emphasizing on Productivity Estimation in Industrial Activities Print

The experience of recently developed countries indicates that industrial development significantly leads to develop other sectors. This means it is important to invest in manufacturing industry. On the other hand، developing countries are often faced with limited resources to invest in industrial projects. Therefore، it is required to indentify productive industries to allocate the limited resources in the industries with highest efficiency. In this paper، we present productivity index that shows the power of industry to achieve comparative advantage at the internal and even external levels. The value of this index is estimated in the 23 manufacturing sectors in Iran based on ISIC Rev. 3. Then، the other key indicators of the industry such as profitability، percentage of skilled labors، structural changes، the share of manufacturing exports، the degree of dependence on foreign raw materials and energy share in production cost are introduced and measured in 1995، 2001 and 2007. Finally، investment priorities in industrial subsectors are identified using numerical taxonomy classification method in 2001 and 2007. Our study shows that in 2001، the other transportation industries، fabricated metal products and chemical products had the highest priority for investment، respectively. However، in 2007، the investment priorities have belonged to chemical products، basic metals and fabricated metal products، respectively. Therefore it is recommended to invest in the intermediate industries.