Concentration measurement under cross-ownership. An application to the Spanish electricity sector

Gilberto Vega () and Javier Campos
Additional contact information
Gilberto Vega: University of Las Palmas de Gran Canaria

Documentos de trabajo conjunto ULL-ULPGC from Facultad de Ciencias Económicas de la ULPGC

Abstract: When major investors own shares in several firms in the same industry, the traditional approach to concentration measurement by the Hirschman-Herfindahl Index (HHI) fails to accurately reflect the level of competition in the market. To address this problem we derive a generalized HHI formula (GHHI) based on the investors' degree of control over each firm. We test alternative definitions of this control with actual data from the Spanish electricity sector and show that recent decisions in this industry, particularly the failed merge between the largest firms, Endesa and Iberdrola, could have been affected had the GHHI been used by the competition agency.

Keywords: Hirschman-Herfindahl index; cross-ownership; electricity industry (search for similar items in EconPapers)
Pages: 25 pages
Date: 2002-09
New Economics Papers: this item is included in nep-com and nep-ind
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.bibliotecas.ulpgc.es/fcee/hemeroteca/do ... 2-06(vers-final).pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.bibliotecas.ulpgc.es:80 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:can:series:2002-06

Access Statistics for this paper

More papers in Documentos de trabajo conjunto ULL-ULPGC from Facultad de Ciencias Económicas de la ULPGC
Bibliographic data for series maintained by Patricia Santana ().