INVESTIGATING THE EFFECT OF INDUSTRIAL CONCENTRATION AND ADVERTISEMENT ON PROFITABILITY OF CONCENTRATED AND PARTIALLY CONCENTRATED FIRMS IN IRAN

Shahram Fattahi and Mohammad Saeed Zabihidan
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Shahram Fattahi: Razi University, Iran.
Mohammad Saeed Zabihidan: Department of Economics, Razi University, Iran.

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Abstract: This study examines the impact of structural and behavioral variables on the economic performance of firms in the partially concentrated and concentrated industries in Iran in 2007. Accordingly, there are 68 industries at the 4 digit code. Four equations in this study include: concentration, advertising, research and development, profitability which are estimated with simultaneous equation system. The result shows the three variables have a positive and significant effect on concentration in the previous period. To be more precise, it could be said that concentration has an on linear relationship with advertising and imports have a positive effect on advertising, while profitability has a negative effect on advertising and R&D. Additionally, concentration has a positive effect on profitability while advertising and R&D have a negative effect on profitability which is considered as cost for existing firms in the industry.

Date: 2015-09-24
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Published in Journal of Global Economics, Management and Business Research, 2015, 5 (2), pp.84-91

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05364395

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