Simultaneous Estimation of Markup and Return to Scale in Manufacturing Industries of Iran

Azami, Somayeh; Jalilian, Sajedeh; Ahmadi, Maryam

doi:10.18869/acadpub.jemr.7.25.183

Volume 7, Issue 25 (10-2016) jemr 2016, 7(25): 183-215 | Back to browse issues page

‎ 10.18869/acadpub.jemr.7.25.183

‎ 20.1001.1.22286454.1395.7.25.6.0

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Azami S, Jalilian S, Ahmadi M. Simultaneous Estimation of Markup and Return to Scale in Manufacturing Industries of Iran. jemr 2016; 7 (25) :183-215
URL: http://jemr.khu.ac.ir/article-1-1290-en.html

Simultaneous Estimation of Markup and Return to Scale in Manufacturing Industries of Iran

Somayeh Azami ^*

¹, Sajedeh Jalilian²

, Maryam Ahmadi²

1- Razi University , sazami_econ@yahoo.com
2- Razi University

Abstract: (7319 Views)

The current study is an attempt to estimate markup and return to scale of 19 two-digit ISIC manufacturing industries of Iran, simultaneously, in accordance to Solow Residual and Structural approach, during the period 1995-2007. Based on Solow Residual approach, the neoclassical assumption of constant return to scale is approved within 95% of manufacturing industries; however in 84% of industries the price was higher than marginal cost significantly. Based on structural approach, 53% of manufacturing industries of Iran are experiencing increasing return to scale significantly; however, in 79% of industries, the price is higher than marginal cost. According to the criteria share of the cost of inputs in income as a theoretic criteria for return to scale-markup ratio, in 53% of cases, structural approach estimates this ratio closer to the reality.

Keywords: Solow Residual Approach, Structural Approach, Manufacturing Industries, Markup, Return to Scale

Full-Text [PDF 3195 kb] (4293 Downloads)

Type of Study: Applicable | Subject: سایر
Received: 2015/08/29 | Accepted: 2016/11/16 | Published: 2016/12/19

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