Market concentration measures and investment decisions in Mexican manufacturing firms
AbstractWe study how alternative measures of market concentration may explain investment decisions of Mexican manufacturing firms. The measures include the Herfindahl-Hirschman Index and the Dominance one. The first one is the traditional measure of market structure concentration. The Dominance Index is a competition measure used by Mexican regulators. The econometric assessments suggest that investment decisions of Mexican firms can be better explained by the Dominance Index measure than by the Herfindahl-Hirschman one. Thus our results suggest that the Mexican Dominance Index might be useful as a measure of market structure and competition. Such conclusion is based on several econometric assessments. In all cases we use certain characteristics of the firms (size, cash flows, investment opportunities and capital intensity) as control variables.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23182.
Date of creation: 17 Feb 2010
Date of revision:
Investment; Dominance Index; Herfindahl-Hirschman Index; Manufacturing; Mexico;
Find related papers by JEL classification:
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-COM-2010-06-18 (Industrial Competition)
- NEP-DEV-2010-06-18 (Development)
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