Analyisis of the Impact of trade on the Dispertion of Monopoly Power in Iran's Manufacturing Sector

Dispersionof monopoly power between industries, regardless of the monopoly power of each industry can lead to inefficient allocation of resources and one of the known strategies to reduce monopoly power and its dispersion is the expansion of trade.Therefore, it is very important to study the impact of trade on monopoly power and monopoly power dispersion. The impact of trade on the dispersion of monopoly power is evaluated in the form of a data panel model. This model considers the dispersion of industrial monopoly power as a function of the dispersion of the degree of openness of the economy(Ratio of Trade to production),the dispersion of total factor productivity and the tariff rate. Also, data have been provided by the survey on Manufacturing establishments with 10 and More Workers of Iran's Statistics Center and Islamic Republic of Iran Customs for the period 1995 to 2013. Findings Trade has an indirect relationship with the dispersion of market power which in turn improves the allocation of resources and thus increases the productivity of factors of production. Therefore, policies that increase trade volume reduce the dispersion of industry monopoly power. Increasing productivity also reduces the dispersion of industry monopolies. Finally, the tariff rate does not have a significant and direct effect on the dispersion of market power.