Concentration Indices: Back to the Drawing Board Patterns in Neighboring Areas

Vassilis Droucopoulos and Theodore Papadogonas
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Vassilis Droucopoulos: Professor, Department of Economics, University of Athens, Greece
Theodore Papadogonas: Research Associate, Department of Economics, University of Athens, Greece

Ekonomia, 2000, vol. 4, issue 1, 55-72

Abstract: This paper delves into a time-honoured, yet unduly neglected, problem that has dogged the construction of concentration ratios, a measure which has been widely used in the industrial economics literature, namely the bias imparted by the existence of (a) ‘specialisation’ and (b) ‘coverage’ (alternatively named ‘exclusiveness’). Equipped with a new, appropriately detailed set of data (Greek manufacturing sector, 1989-1992), we demonstrate the presence of bias and perform various tests which gauge the extent to which ordinarily estimated concentration ratios are defective. Finally, we suggest guidelines for their correction and proper use, so that newly designed concentration ratios will be an improvement over past practice.

JEL-codes: L10 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ekn:ekonom:v:4:y:2000:i:1:p:55-72

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