Scarcity of production resources and their nonoptimal utilitization in production sectors — particularly in rural small industries — are factors that necessitate studies of these industries’ productivity. In this study data and information were obtained through questionaires as well as interviews with 80 managers of rural small industries in Khorasan province. Production function and index approaches were used to measure the productivity of sample units. Also, factors affecting productivity of these industries were studied. The results indicated that productivity of production factors (capital, labor material and energy) were 0.587, 31856 thousend Rials , 21.61, 8.02, respectivly and TFP was masured to be 0.786. Furthermore, the results of this sutdy indicated that mean TFP of these industries (selolezi, chemical , food, metalic , non metalic and textile industries)were not significantly different from each other. Results of the study did not indicate any significant diffrence between means of labor and energy productivities and between the mean TFPs among units of public and private sectors, but it was observed that capital productivity of private sector units and material productivity in public sector units were significantly higher.
Key words: R
)