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Determining the Level of Market Concentration in the Construction Sector—Case of Application of the HHI Index

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  • Kęstutis Peleckis

    (Department of Economics Engineering, Faculty of Business Management, Vilnius Gediminas Technical University, 10223 Vilnius, Lithuania)

Abstract

Background—competitive conditions are often distorted in the construction sector, therefore this affects the market position of all participants. This paper seeks to find the tools for properly assessment of participants by Herfindahl-Hirschmann index (HHI) and to identify what parameters have the greatest impact in the competitiveness of the construction sector. Methods: in this article the DEMATEL method was used whereas tool for assessing the balance of market concentration as it may help to determine factor with the greatest influence on a firm’s HHI. Results in this work showed how different parameters affect each other and their impact on a value of a firms’s HHI. When the parameters are determined, they can be useful for assesment of mergers their influence on the HHI and alteration of the market’s power balance. Conclusions—The calculation of the HHI by using the DEMATEL method allowed to check the empirical implementation check of the multicriteria assessment method, on the market power of business entities, operating in the distorted market conditions of the construction sector.

Suggested Citation

  • Kęstutis Peleckis, 2022. "Determining the Level of Market Concentration in the Construction Sector—Case of Application of the HHI Index," Sustainability, MDPI, vol. 14(2), pages 1-16, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:2:p:779-:d:722198
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