Value added is a criterion for evaluating the performance of economic units. Statistics related to various economic indicators of industrial workshops located in Iranian provinces with their value added are annually obtained by Statistical Centre of Iran via “Industrial Workshops Survey” program. This study is going to find the most important factors affecting the value added of the workshops, by using one of the newest methods for variable selection, called SCAD penalty function.
The results show that from 1997 to 2006, the amount of labour education, type of workshops management, audit fee, research and propaganda cost, and land value are of the highest important for producing value added of the industrial workshops.
JEL classification: C13, C23