EconStor >
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim >
ZEW Discussion Papers, Zentrum für Europäische Wirtschaftsforschung (ZEW) >

Please use this identifier to cite or link to this item:
Title:A Test of the Quality of Concentration Indices PDF Logo
Authors:Heger, Diana
Kraft, Kornelius
Issue Date:2008
Series/Report no.:ZEW Discussion Papers 08-072
Abstract:Theory predicts a positive relationship between market concentration and profitability in most scenarios. In empirical work, however, this relation is frequently not found or only a weak connection is observed. We compare the performance of concentration and market share variables, which are generated on the basis of the official industry classification, with information collected directly from firms. Information from companies on the number of competitors, their relative size and the intensity of price competition is highly significant in explaining profit levels, while none of the concentration indices performs well. Hence, the poor quality of industry data is responsible for the loose connection that is usually found between concentration and profitability.
Subjects:Concentration Indices
Discrete Regression Models
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers, Zentrum für Europäische Wirtschaftsforschung (ZEW)
Publikationen von Forscherinnen und Forschern des Zentrums für Europäische Wirtschaftsforschung (ZEW)

Files in This Item:
File Description SizeFormat
dp08072.pdf213.57 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.