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

In: Entrepreneurship, Business and Economics - Vol. 1

Author

Listed:
  • 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)

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.

Suggested Citation

  • Cristian Bușu & Mihail Bușu & Alexandra Cătălina Nedelcu, 2016. "Empirical Indicators for Evaluating the Concentration Degree on the Market: Case Study on Romanian Automotive Market," Eurasian Studies in Business and Economics, in: Mehmet Huseyin Bilgin & Hakan Danis (ed.), Entrepreneurship, Business and Economics - Vol. 1, edition 1, pages 277-288, Springer.
    • Handle: RePEc:spr:eurchp:978-3-319-27570-3_22
    DOI: 10.1007/978-3-319-27570-3_22
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