Cost Pass through in Iran’s Manufacturing Sector

In a partial competition, the rate of costs transferring, especially for countries following the economic liberalization, is the main decisive factor in the impact of increasing the firm's cost on the prices of products.The main purpose of this study is to investigate the rate and decisive factors of cost transferring of Iran's manufacturing industry. There for, the rate of the cost transferring of 114 manufacturing industry has been calculated in four-digit ISIC level by using the micro data of Iran's industrial firms, and the decisive factors of the transferring has been estimated through panel data.The results show that the concentration ratio and economics of scale have positive and meaningful effects on the price of cost transferring.Moreover, the study shows the firms with more powerful but less profitable markets are more capable in cost transferring rather than the firms with less powerful but more profitable market. The findings indicate the positive and meaningful effect of the number of firms on cost transferring. Overall, the rate of cost transferring depends on the structure of market.