Causality Relationship between Research and Development Intensity and Market Structure in Iraninan Textiles industries (A Hsiao- Granger Causality in the Panel Data)

The main objective of this paper is to examine the impact of Research and Development Intensity as behavioral variable and market share as structural variables on the Iranian Textiles Industries. For this purpose, data on industrial workshops with 10 employees or more and the Hsiao’s Granger Causality and Granger Causality in panel data is used along with the data during the period of 1995-2009 to study this issue. Moreover, the empirical model of this study has been estimated by the Panel Data approach.The empirical results indicate that the Research and Development Intensity has positive and significant effects on the market share of Iranian Textiles Industries.Hence, in order to change the market structure of monopolistic to competition in the textile industry in Iran, has been the need to support research activities in these industries.