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

2022 ◽  
Vol 14 (2) ◽  
pp. 779
Author(s):  
Kęstutis Peleckis

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.

2019 ◽  
Vol 2 (1) ◽  
pp. 33-67
Author(s):  
Hottua Manalu

This article discusses about corporation action notification on the competition law perspective. Corporation action notification is a notification obligations by the business actor to the Business Competition Supervisory Commision about corporation action in the form of incorporation, fusion, or company share acquition that caused asset value or sales value is ecxceed specific value. This article concluded that notification is an important instrument to prevent monopolistic practices and unfair competition, because a corporation action has an influence towards business competition, that can increase market concentration and this can make a product price more higher and business actor’s market power become bigger so that can threatening small business actor. However, the notification nowadays applied in Indonesia is notification to the commission after the corporation action has been done, or as known as post-notification, actually is not effective to prevent monopolistic practices and unfair competition, because of the notification is delivered after the corporation action has been done, so that in case the Commission assess that the corporation action is causing monopolistic practices and unfair competition then the revocation is complicated. Therefore, this article is encouraging notification to be done before corporation action is started, as known as pra-notification, so monopolistic  practices and unfair competition possibility can be detected earlier and can be prevented. Abstrak Artikel ini membahas notifikasi aksi korporasi dalam perspektif hukum persaingan usaha. Notifikasi aksi korporasi adalah kewajiban pemberitahuan oleh pelaku usaha kepada Komisi Pengawas Persaingan Usaha atas aksi korporasi baik dalam bentuk penggabungan, peleburan, maupun pengambilalihan saham perseroan yang berakibat nilai aset dan atau nilai penjualannya melebihi jumlah tertentu. Artikel ini menyimpulkan, notifikasi merupakan instrumen penting dalam mencegah praktik monopoli dan persaingan usaha tidak sehat, dikarenakan aksi korporasi berpengaruh terhadap persaingan usaha, yaitu menyebabkan bertambahnya konsentrasi pasar yang dapat menyebabkan harga produk semakin tinggi dan kekuatan pasar pelaku usaha menjadi semakin besar sehingga dapat mengancam pebisnis kecil. Namun demikian, notifikasi yang saat ini berlaku di Indonesia, yaitu pemberitahuan kepada Komisi setelah aksi korporasi selesai dilakukan, atau yang dikenali dengan post-notifikasi, sesungguhnya tidak efektif mencegah praktik monopoli dan persaingan usaha tidak sehat, dikarenakan notifikasi disampaikan setelah aksi korporasi selesai dilakukan, sehingga dalam hal Komisi menilai aksi korporasi menyebabkan praktik monopoli dan persaingan usaha tidak sehat maka pembatalan jelas mengalami kerumitan. Oleh karenanya, artikel ini mendorong notifikasi dilakukan sebelum aksi korporasi dilakukan, yang disebut dengan pra-notifikasi, agar kemungkinan terjadinya praktik monopoli dan persaingan usaha tidak sehat diketahui sejak dini dan dapat dicegah.


2021 ◽  
Vol 129 ◽  
pp. 12003
Author(s):  
Kęstutis Peleckis

Research background: this study identified which factors influence other factors and how they have a greater impact on the value of a business entity’s HHI index. By knowing the key factors, they can be used to model possible mergers and their impact on the HHI index and possible changes in the market power balance. Purpose of the article: to present the concept of business negotiation system, enabling to model and effectively manage the process of development and implementation of negotiation strategies, assessing the negotiating power of negotiating parties and selecting multi-criteria assessment tools to balance them in the conditions of distorted construction sector market competition. Methods: multi-criteria assessment is used to assess the market power of business entities in business negotiations in order to select effective strategic solutions for construction sector’s business negotiations. Findings & Value added: a developed algorithm for the development of construction sector’s business negotiation strategy based on evaluations of bargaining power is presented.


Author(s):  
O.F. Bystrov ◽  
◽  
A.A. Rubtsova ◽  

The basic algorithm of the BOF method is described. The method of applying the BOF method is presented in the case of both positive and negative values of quantitative values of indicators, using the transition from real values to encoded ones. The proposed method is an innovation that allows you to conduct a comparative analysis of any number of enterprises and projects in terms of their financial stability. The methods described in this article can be used for crisis management, as well as for calculating the balance of a portfolio of projects and programs.


Author(s):  
Aleksandar Bogojević

Contemporary directions of the market liberalization should lead to a bigger number of market participants and to a bigger degree of competition among them. This again, leads to a more diversified offer and to bigger quality products along with higher level of services with cheaper rates. In order to control the mentioned processes, analysis of market concentration is needed, as well as studying and perfection of the methods that allow measurement of market concentration. The degree of market concentration which on a specific market one or more economic subjects have is defined as ‘’market power’’. Economic efficiency on a specific market largely depends on whether non competitive market structures which produce adverse effects on economic efficiency are existent on that market, which ultimately affects on the overall well – being. Conversance of the degree of concentration of a specific (relevant) market is important so that breaching of the market principles can be timely spotted and so that appropriate measures can be taken. Supervision over the market and the market processes, as well as appliance of specific measuring methods of market concentration have the goal of establishing and maintenance of free market competition in which all of the economic subjects participate under the same conditions.


2020 ◽  
Vol 10 (9) ◽  
pp. 2047-2061
Author(s):  
I.V. Sibiryatkina ◽  

The article presents the systematization of approaches to assess the enterprises' level of competitiveness. The advantages and disadvantages of the most famous models for assessing the competitiveness of business entities are considered. The identified shortcomings made it possible to form a hypothesis for studying the enterprises' competitiveness, taking into account the industry factor, financial criteria and quality indicators of the enterprise. For the formation of an objective adaptation model for assessing the competitiveness of an enterprise, taking into account its industry specificity, the author's approach to assessing the competitiveness of an enterprise, taking into account industry specifics, based on the relative and qualitative indicators of the enterprise's activities, selected by the expert assessment method, is considered. For trade enterprises, groups of the most significant indicators have been formed that characterize the competitiveness in the areas of observation of the sales of a trade enterprise, its costs, financial position and financial results, for the market share of the trade enterprise, the level of prices for goods, for the level of service of the trade enterprise. The indicators characterizing the level of competitiveness of a trading enterprise are divided into relative critical indicators and a group of qualitative critical indicators, which are included in the calculation of the complex coefficient of enterprise competitiveness model based on the theory of effective competition according to the weighted average arithmetic formula. The article presents the results of approbation of the proposed methodology on the example of the “PAO Magnit” trading enterprise and its trade competitors operating in Voronezh. The obtained results of the author's methodology for assessing the competitiveness of a trading enterprise have practical significance; the proposed model can be adapted according to the criteria for selecting indicators and their quantitative indicator, which contributes to the use of this toolkit in future studies of the competitiveness of trading enterprises.


Author(s):  
C A Balaras ◽  
K G Droutsa ◽  
E G Dascalaki ◽  
S Kontoyiannidis ◽  
A Moro ◽  
...  

2011 ◽  
Vol 60 (2) ◽  
Author(s):  
Justus Haucap ◽  
Tobias Wenzel

AbstractThe Internet is characterized by competition between platforms which bring together potential partners of exchange. The degree of competition between these multi-sided platforms und market concentration are determined through (1) the strength of the direct and indirect network effects, (2) the extent of economies of scale, (3) the risk of congestition, (4) platform differentiation, and (5) the possibility of multi-homing. Depending on these factors different market concentrations and barriers to entry result. While there is no general tendency for concentration in the Internet and no general need for special market regulation of online content providers and intermediaries, single platforms may still have long lasting and significant market power which is unlikely to erode fastly, as the example of ebay illustrates.


2021 ◽  
Vol 21 (01) ◽  
Author(s):  
Ufuk Akcigit ◽  
Wenjie Chen ◽  
Federico Diez ◽  
Romain Duval ◽  
Philipp Engler ◽  
...  

Corporate market power has risen in recent decades, and new estimates in this note suggest that the likely wave of small and medium-sized enterprise bankruptcies from the ongoing pandemic will further strengthen market concentration. Whether and how policymakers should address this issue is hotly debated. This note provides new evidence on the policy relevance of rising market power and highlights possible implications for the design of competition policy frameworks and macroeconomic policies.


2020 ◽  
pp. 0148558X2096624
Author(s):  
Marleen Willekens ◽  
Simon Dekeyser ◽  
Liesbeth Bruynseels ◽  
Wieteke Numan

This study examines whether auditor market power is associated with audit quality. Regulators around the world have repeatedly expressed concerns about the high levels of supplier concentration, the limited number of audit suppliers in the audit market, and the potential adverse consequences of their (alleged) market power. Using U.S. data from 2009 to 2017, we examine the effect on audit quality of two competing measures of auditor market power: (a) a “traditional” market concentration measure (Herfindahl index) and (b) a competing measure derived from spatial competition theory (i.e., market share distance from the closest competitor). Following Aobdia, we infer audit quality from two measures of financial reporting quality: (a) the level of absolute abnormal accruals, and (b) the incidence of financial statement restatements. Our results indicate that industry market share distance is positively associated with audit quality, but we do not find an association between market concentration and audit quality. In addition, we find that the positive association between market share distance and audit quality only holds when the incumbent auditor is a market leader, although industry leadership itself is not significantly associated with audit quality. These findings suggest that audit quality is positively affected by a market leader’s industry market share dominance over its competitors rather than by industry specialization per se. JEL Classification: M4; L0


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