Concentration Indices: Back to the Drawing Board Patterns in Neighboring Areas
This paper delves into a time-honoured, yet unduly neglected, problem that has dogged the construction of concentration ratios, a measure which has been widely used in the industrial economics literature, namely the bias imparted by the existence of (a) ‘specialisation’ and (b) ‘coverage’ (alternatively named ‘exclusiveness’). Equipped with a new, appropriately detailed set of data (Greek manufacturing sector, 1989-1992), we demonstrate the presence of bias and perform various tests which gauge the extent to which ordinarily estimated concentration ratios are defective. Finally, we suggest guidelines for their correction and proper use, so that newly designed concentration ratios will be an improvement over past practice.
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Volume (Year): 4 (2000)
Issue (Month): 1 (Summer)
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