The main purpose of this paper is to examine the efficiency of competitive product market shares in listed companies in Tehran Stock Exchange. Competition criteria in this study included "industry concentration", "replacement the goods", "market size", "Index-Q Tobin," "barriers to entry" (capital intensity). Therefore, a sample of 87 companies during the years 2003 to 2011 were examined. The results showed that there was a significant negative relation between industry concentration, the

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... tute goods, market size and index-Q Tobin with stock returns. However, there is no significant relationship between stock returns and barriers to entry. The results of this study indicate that firms with high competitiveness earn low efficiency. Introduction The first theory of asset pricing in economics and finance was suggested after the model of pricing financial assets was raised by Sharpe (1964), Linter (1965) and Black (1977). Now CAPM is 40 years old. According to the results of field studies, this model is a model widely used today in various fields such as estimating in stock, managed portfolio performance evaluation etc. But this model explains that the only difference between stock returns is the systematic risk or beta coefficient. However, existing empirical evidence suggests that beta, as an indicator of systemic risk, does not explain alone the difference between the stock returns and other variables. The other indicator such as firm size, price-earnings ratio and the ratio of book value to market value play an important role in explaining the stock return. Recent empirical research indicates that, in some countries, in addition to the above factors, competitive product market also affects stock returns. Thus, the aim of this study is to provide the evidence showing product market competition has the effect on stock returns of listed companies in Tehran Stock Exchange.