Empirical Indicators for Evaluating the Concentration Degree on the Market: Case Study on Romanian Automotive Market

Cristian Bușu (), Mihail Bușu () and Alexandra Cătălina Nedelcu ()
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Cristian Bușu: The Bucharest University of Economic Studies
Mihail Bușu: The Bucharest University of Economic Studies
Alexandra Cătălina Nedelcu: The Bucharest University of Economic Studies

A chapter in Entrepreneurship, Business and Economics - Vol. 1, 2016, pp 277-288 from Springer

Abstract: Abstract Nowadays, the competition authorities focus on market development, with the observance of its characteristics and players’ behavior. One important step towards analyzing the relevant market is to compute the concentration degree of the market. This article presents the most important competition indicators used on computing the market concentration, the limitations of the Concentration Indexes and some empirical methods on how the indexes could be approximated with small irrelevant errors. When all the market shares on a specific sector are known, it is easy to compute the Concentration Indexes and draw conclusions about the degree of concentration on that market. Competition authorities may face a problem when not knowing the market share for each participant, and they need to make an approximation regarding the concentration degree of that specific market. The Case Study presented in this article shows the evolution of the market shares of the most important players in automotive field and it gives an example of how to compute the concentration degree on a specific market. Along the most common concentration indicator, the Herfindahl–Hirschman Index (HHI), there are also introduced other important indicators such as: the Concentration Ratio and the Comprehensive Concentration Index (CCI) and their application on the Auto Market.

Keywords: Competition; Market dimensioning; Market concentration indicators (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:eurchp:978-3-319-27570-3_22

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DOI: 10.1007/978-3-319-27570-3_22

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