*Master Student of Industrial Engineering, Department of Engineering, Zahedan Branch, Islamic Azad University, Zahedan, Iran
**PhD Economics, Department of Economics, University of Sistan and Baluchestan, Zahedan, Iran
The central purpose of this study was to investigate the relationship between market structure and technical efficiency in the Iranian manufacturing industries. In this study, we use data from Iranian industry sector in the four-digit level of ISIC code for the period 1996–2009 and panel data model. The regression model for this research constructed based on the Clark-Davis model and using market structural variables such as economies of scale, Herfindahl -Hirschman concentration index, skilled workers ratio, depreciation to capital ratio and the share of state ownership. Also, to measure the technical efficiency, stochastic frontier analysis (SFA) is used. The results indicate that most of the factors affecting the level of market concentration have significant effect on technical efficiency in Iranian manufacturing industries. In addition, there is a negative correlation between concentration and efficiency, so that with increase of concentration ratio, industry's efficiency has declined.
Market Structure, Concentration Index, Technical Efficiency, Stochastic Frontier Function
