In an era of globalized competition, productivity has become a crucial factor determining profitability, competitiveness and the growth of a firm. High productivity means lower per unit cost and, therefore, ability of the firm to match prices on the global markets. Because of that, there has been an increasing interest recently in the literature on factors affecting productivity. This paper investigates the determinants of labor productivity at the firm level in the Iran’s manufacturing sector. The analysis is based on descriptive statistics and cross sectional regression models on a sample of 12299 Industrial firms. The results show that labor productivity is positively related to wage, fixed capital per employee, export orientation, R&D activity and Education of labor force.
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