Table of contents list of acronyms

MEASURE OF EXTENT OF COMPETITION

Download 0.77 Mb.

View original pdf

Page	69/136
Date	17.12.2020
Size	0.77 Mb.
	#55133

1 ... 65 66 67 68 69 70 71 72 ... 136

PR-14-13

5.2. MEASURE OF EXTENT OF COMPETITION
The measure most commonly used by regulatory agencies to assess degree of competition is the Herfindahl–Hirshman Index, HHI, which is quantified as follows
=
… … … … … (2) where
S
i
= market share of the ith firm supplying in the market

n = number of suppliers The lower the value of HHI the more intense the degree of competition. A threshold level of HHI adopted by regulatory agencies, including the Competition Commission of Pakistan (CCP) is
1800, beyond which the market is considered as not meeting competitive norms.

54
Other measures of competitiveness include the following i) domestic prices compared to prices in other countries, especially neighbours ii) rate of entry of new firms iii) extent of excess capacity iv) rate of profitability v) degree of innovation in the form of new products and cost cutting improvements.

Download 0.77 Mb.

Share with your friends:

1 ... 65 66 67 68 69 70 71 72 ... 136