An Investigation into the Relationship between Innovation and Market Structure in Iranian Manufacturing Industries

Mohammad Nabi Shahiki Tash¹, Reza Rooshan², Hamideh Karami³

¹Assistant Professor, Department of Economics, University of Sistan and Baluchestan

Mohammad_tash@eco.usb.ac.ir

²Department of Economics, University of Sistan and Baluchestan

³M.A. Student, University of Sistan and Baluchestan Karamihamideh81@yahoo.com

Accepted 15 September 2014

Abstract

The aim of the person study to investigate the relationship between market structure and innovation coefficient in Iranian manufacturing industries. To achieve this objective, Herfindahl-Hirshman Index and Comanor and Willson’s scale were considered as measures of market structure. A hybrid fuzzy measure based on such variables as RandD expenditure, the number of experts in each industry and amount of capital equipment import has been used to measure technology coefficient. The present study uses data available from 129 active industries with the four-digit ISIC (international standard industrial classification) from1996 to 2010. The results show that there is an inverted relationship between concentration level and innovation. Moreover, it was found that there is a positive relationship between economies of scale and innovation coefficient in Iran.

Keywords: Herfindahl-Hirshman Index, Economy of scale, Innovation, Hybrid data, manufacturing industries