Concentration Index and It's Effect on the Market Margin in Poultry Slaughter Industry of Mazandaran Province

Given the large share of Mazandaran province in the country's poultry meat production, this research aims to measure Herfindal index of the poultry slaughter industry in this province. New Empirical Industrial Organization (NEIO) approach is used to calculate the wholesale margin of poultry slaughter industry and market power of firms in the purchase of major inputs in Mazandaran. It also examines the effect of concentration index on the performance of firms, so that this effect is distinguished in two elements: market power and cost efficiency. The results of the simultaneous equations system indicates that poultry slaughter houses don`t have market power in Mazandaran, so they are price takers. Despite the low concentration of market power of firms, they are smaller than the costs efficiency. However this low concentration can cause market power resulting from the impact of the leading firms with high share of production. Due to rising energy prices in recent years, reduction of concentration index has not been able to compensate the price distortion of poultry slaughter industry performance at the wholesale level.