Sayyed Alireza Kazerooni - Professor of Economics, University of Tabriz,
Sakineh Sojoodi - Ph.D. Student in Economics at University of Tabriz
Sima Nasibparast - Ph.D. Student in Economics at University of Tabriz

lot of theoretical and empirical studies have proved positive relationship between financial markets development and economic growth. According to these studies,developed financial markets not only lead to efficient allocation of funds to the projects with high rate of return, but also facilitate the process of economic growth through increasing savings and investment. In recent years and after financial crises in the countries with developed financial markets, researchers and policy makers haspaid more attention to the volume of financial system activities as well as financial markets structure especially the effect of competition in banking industry on the othereconomic variables. The existence of competition in banking industry can cause efficiency followed by increased economic growth. On the other hand it can lead todual fixed cost and decreased economic growth. Since 1380, when private sector activity in the banking industry increased in Iran, some substantial changes occurred in the financial markets structure and competition indicators in this industry have increased significantly. The objective of this study is to investigate the effect of competition indicators in the banking industry on GDP growth during 1370-1390. For this purpose, the endogenous growth models and usual time series methods are used. The results of this study show that concentration and absence of competition in the banking industry has negative effect on economic growth in Iran.

Financial Markets, Banking Industry, Competition, Concentration, Production Growth