Evaluating the Impact of Schumpeterian & Escape of Competition Effects on the Productivity of Iran’s Manufacturing Sector

The aim of this paper is to evaluate the impacts of both import and the firm entrance into industrial markets on Iran’s manufacturing sector performance. To achieve this goal, using dynamic panel data and the Nickell residual approach, the impacts of degree of competition and technology gap on the growth of productivity were estimated. our findings indicate that increasing import would lead to increasing productivity in industries with low technology gap due to competition escape effect, while in high technology  gap industries lead to decreasing productivity  because of  Schumpeterian effect. In addition, the results confirm that the entry of new firms into the market does not stimulate the Schumpeterian and competition escape mechanisims. The results also indicate that the entrance of potentials firms brings about the improving the productivity in monopolistic industries  and worsening  productivity in competitive industries.