Industries Competitiveness Ranking according to Labor Flexibility Indicator

Globalization has increased competition level among various industries and firms. Therefore any firm should inevitably improve its competition power in order to survive in global economy. Hence different firms try to increase the flexibility of their labor market to decrease their costs and become more flexible in the face of global market situations; this, in turn, makes them more competitive. This study focuses on informal employment to assess how much the informal employment could be effective on labor flexibility and competitiveness of firms and as a result on the trend of Iran’s movement toward global economy. The results indicate that such an impact is positive in competitive activities and industries that have lower technology and such firms should use informal employment to improve competitiveness. Finally, dynamic competitive advantages indicator which is a balanced combination of competitiveness indicator and informal employment share is introduced for ranking the industries.