The structure-conduct-performance (SCP) paradigm has constituted an enduring empirical tradition in empirical industrial economics and has the advantage of clarifying the basic building blocks of the competitive mechanisms. This paper presents a SCP model to estimate causes and effects in Iranian manufacturing industry in 2009. The model used in this paper is a system of four simultaneous equations: agglomeration as the standard measure of structure, advertising and R&D as the standard measure of conduct and profitability as the standard measure of performance. Using the data from a sample of Iranian industries, three-stage least squares results indicate that: a) Advertisement has positive and significant impacts on agglomeration and profitability. b) Profitability has positive and significant impacts on agglomeration and advertisement. c) Agglomeration has positive and significant impact on profitability and also a negative impact on advertisement.

Keywords: Market Structure, Conduct, Performance, Iranian Manufacturing Industry, Simultaneous Equations, Three-stage Least Squares.

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