Authors
Abstract
Concentration is regarded as one of the most important aspects of market structure and it helps us to consider market structure. It is usually used in empirical studies of market and industry structure to determine the degree of competition and monopoly. Also, it is possible to design appropriate program toward desired performance by studying time trend of concentration and recognition of effective factors on concentration variation. This study aims to investigate the effects of trade liberalization on industrial concentration in various levels of manufacturing industries (ISIC 4digits). for this purpose "Raw data comprehensive project of the industrial firms of Iran during 1994-2004" were used, Also, panel model with cross fixed effect was chosen for estimation, after doing stability test of Levin-Lin-Chu and specification tests of Chow, Brousch-Pagan and Hausman. The results show that trade liberalization has negative effect on industrial concentration and make the market structure more competitive. To investigate the effects of trade liberalization on industries with competitive and monopoly structure, two groups including low and high concentrated industries were considered. Results of this grouping show that the liberalization leads to a decrease in the level of concentration in the low concentrated group. Also, adjusted concentration index was used in order to investigate domestic market.
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