The Relationship Between Dispersion of Productivity in Iranian Manufacturing Industries and the Boone Competition Index

Productivity and competition in manufacturing industries have a vital role in economic growth and development. In each industry, various firms compete with each other and have different productivity level (productivity dispersion). Theoretically, there is a negative relationship between productivity dispersion and competition in an industry. To examine this relationship in the country's manufacturing industries, first, the total factor productivity at the firm level with 4-digit ISIC codes was estimated using the Mollisi and Ravigati method in 2017. Then, productivity dispersion at the industry level with 2-digit ISIC codes was calculated using the Gini inequality index. The competitive behavior of industries at the 2-digit level of the ISIC code was also obtained based on the John Boone index in 2008 as a new method for calculating the size of competition and monopoly for the average period of 2016 to 2020. Then, the relationship between these two variables was analyzed. Finally, the most important findings of the article showed that there is no significant negative relationship between competition and the dispersion of factor productivity in Iran’s manufacturing industries, and they are statistically independent.