Study of the Relation between Performance and Rate of Concentration and Innovation in Iran Industries by Using PVAR Regression Models

The main goal of this paper is to investigate the relation between industry performance, market structure and innovation in Iran manufacturing industries. For this purpose, the performance of 130 different industrial groups will be analyzed and discussed by Panel Vector Auto Regressive Regression (PVAR) and Generalized Model of Moment GMM based on International Standard Industrial Classification (ISIC) during 1996-2010. The findings represent that industry performance has significant and stable effects on Market concentration. Also, the results of Impulse-Response Functions indicate that Structure Shocks affect the profitability of Iran manufacturing sector in short run, but market structure is not related to profitability in long run. The study of Variance Decomposition and R&D activities explain most variations in market structure and market Concentration. However, the profitability is affected by concentration and R&D activities. It has most effects on the variations of R&D activities.