Industry concentration

The total market share of the top N largest enterprises in the relevant market of an industry

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Concentration Ratio, also known as industry Concentration rate Or Market Concentration Rate, which refers to the Relevant markets Proportion of top N enterprises market share (Output value, output, sales volume, sales volume Number of employees 、 Total assets The sum of market structure The measurement index of concentration degree is used to measure the difference between the number and relative size of enterprises Market power Important quantitative indicators.

The industry concentration of the Internet is used to reflect the operation of websites, Internet applications or online games statistical indicators 。

Chinese name: Industry concentration

Foreign name: Concentration Ratio
Alias: Industry concentration rate 、 Market concentration

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Measures

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Industry concentration is determined market structure The most basic and important factor reflects the degree of competition and monopoly in the market. The frequently used concentration measurement indicators are: industry Concentration rate (CRn Index), Herfindahl Hirschman Index (HHI) Lorentz curve 、 Gini coefficient , inverse exponent and Entropy index Among them, the concentration rate (CRn) and the Hirschmann index (HHI) are often used in the anti-monopoly economic analysis.

There are many specific methods and corresponding indicators to measure industry concentration. Here, absolute concentration (CRn) and Herfindahl Hirschmann index (HHI) are selected as indicators to measure market concentration.

Industry concentration rate (CRn index)

Figure 1 Index Formula

Industry concentration rate refers to the Relevant markets The total market share of the top N enterprises in China. For example, CR4 means that the four largest enterprises occupy the relevant market share. Similarly, five enterprise concentration ratios (CR5) and eight enterprise concentration ratios (CR8) can be calculated. However, the disadvantage of the concentration rate is that it does not indicate the total number of enterprises operating and competing in the relevant market of this industry. For example, the share of CR4 with the same high 75% in two industries may be different, because one industry may have only a few enterprises and the other industry may have many enterprises. CRn index is based on the cumulative market share of the largest n enterprises in the industry Industrial market Is represented by the ratio of. Industrial Total sales Is X, the sales volume of the ith enterprise is Xi, then the market share of the ith enterprise is Si=Xi/X. If CRn is the sum of the market shares of the largest n enterprises in the industry, then it is: (see Figure 1, Formula 1)

It is generally believed that if the industry concentration ratio CR4 or CR8<40, the industry is competitive; If 30 ≤ CR4 or 40 ≤ CR8, the industry is oligopoly.

The calculation of CRn can be subdivided into the following two cases:

(1) Given the market share of the industry Calculation formula : (See Figure 1, Formula 2)

Among them, Si is the market share of the ith enterprise and the total number of enterprises in the industry.

(2) The output value, output, sales volume, sales volume Number of employees 、 Total assets The calculation formula is as follows (see Figure 1, Formula 3), where:

CRn: industry concentration of the first few enterprises with the largest scale;

i: Represents the output value, output, sales volume, sales volume, number of employees, total assets, etc. of the ith enterprise;

n: Top companies with the largest scale in the industry Number of enterprises ；

Bain's classification of market structure

N: Total number of enterprises in the industry. Generally, n=4 or n=8, at this time, the industry concentration ratio represents the concentration ratio of the top four or eight enterprises with the largest scale in the industry.

According to American economists Bain and Nihon Tong Industry and province Industrial concentration The division criteria of Industrial market structure It can be roughly divided into oligopoly type (CR8 ≥ 40%) and competitive type (CR8<40%). Among them, oligopoly can be subdivided into extremely high oligopoly (CR8 ≥ 70%) and low concentration oligopoly (40% ≤ CR8<70%); The competitive type is subdivided into the low centralized competitive type (20% ≤ CR8<40%) and the decentralized competitive type (CR8<20%).

Herfindahl Hirschmann index (HHI index)

(1) Index concept

HHI index, namely Herschman Herfindahl Index, refers to the sum of the squares of the market shares of all enterprises in the relevant market, based on the total number and size distribution of enterprises in the industry. This indicator was first proposed by A. Hirschman, and further elaborated by 0 Herfindahl of Columbia University in his doctoral thesis Concentration of Steel Industry in 1950. The Hirschmann exponent has a mathematical absolute sum Relative method Its advantages make it an ideal market concentration measurement indicator, which can measure the impact of enterprises' market share on market concentration and become a government review M&A Is an important administrative standard.

The index is expressed by the formula: (see Figure 1, Formula 4)

The meaning of this index is that it gives each enterprise a market share of Si Weight This weight is its market share itself. It can be seen that it gives more weight to large enterprises and fully reflects their market share. The higher the index value, the higher the concentration, and vice versa.

(2) The Application of Hirschmann Index in Antitrust Analysis

First, low degree Centralized market 。 US and EU M&A Guide It is agreed that if M&A When the Hirschmann index is less than 1000 in the post market, it belongs to Safe Harbor M&A has no anti competitive effect.

Second, moderately concentrated market 。 The United States believes that the Hirschman index in the market after mergers and acquisitions is between 1000 and 1800, and the Hirschman index after mergers and acquisitions is less than 100 points higher than that before mergers and acquisitions, which generally has no anti competitive effect; However, if the Hirschmann index increases by more than 100 points, it may have anti competitive effects and needs further analysis. The EU believes that the Hirschman index in the market after mergers and acquisitions is between 1000 and 2000, and the Hirschman index after mergers and acquisitions is less than 250 points higher than that before mergers and acquisitions, which generally has no anti competitive effect, with exceptions; If the Hirschmann index increases by 250 points or more after M&A compared with that before M&A, it may have anti competitive effects and needs further analysis; In moderately concentrated markets, the EU has a looser initial threshold than the United States.

Industry concentration

Third, highly concentrated market 。 The United States believes that when the Hirschman index increases by more than 1800 after mergers and acquisitions, it is a highly concentrated market, and the increase of the Hirschman index after mergers and acquisitions is less than 50 points compared with that before mergers and acquisitions, which generally has no anti competitive effect; If the Hirschmann index after the merger is more than 50 points and less than 100 points higher than that before the merger, it may have anti competitive effects and needs further analysis; If the Hirschmann index after M&A is more than 100 points higher than that before M&A, it generally has anti competitive effect, but it needs to be further analyzed by integrating other factors. The EU believes that the market is highly concentrated only when the Heshman index increases by more than 2000, and the increase of the Heshman index after the merger is less than 150 points compared with that before the merger, which generally has no anti competitive effect, but there are exceptions; However, if the Hirschmann index after M&A is 150 points or more higher than that before M&A, it may have anti competitive effects and needs further analysis; In highly concentrated markets, the EU and the United States have market concentration thresholds Gradational difference 。

Fourth, the value of the Hirschmann index in practice 。 M&A The Heshman index measured by Zhongshi is usually much higher than the Heshman index standard specified in the Merger and Acquisition Guide of the United States and the European Union, which means that the Heshman index standard specified in the Merger and Acquisition Guide is only for reference and cannot play a decisive role in the anti-monopoly law enforcement decisions of enterprise mergers and acquisitions. The actual law enforcement decisions should take market concentration, market share Market entry barriers 、 unilateral effects , coordination effect, efficiency and other factors, we should also consider whether there are reasons for exemption or exemption.

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The logic of the traditional judgment method is that a certain indicator (sales volume or sales volume) of the first few enterprises accounts for percentage Represents an enterprise Industrial concentration The size of, can indicate its position in the market and the strength of market dominance, is an important symbol of corporate image. This logic is based on tradition mass production The market and industry situation of the era, because the difference between products is not obvious, the sales volume or sales volume of the enterprise can explain the Overall structure However, in the development of modern economy, this situation has changed significantly.

First of all, the product classification is increasingly refined, the length and depth of product lines are constantly strengthened, and the differences between products are increasingly large, so the sales volume data cannot accurately judge the industry Concentration 。

Secondly, even though the calculation of industry concentration based on sales volume is effective compared with the calculation based on sales volume, its meaning is limited. It is generally believed that if the industry concentration CR4 <30 or CR8 <40, the industry is competitive; If 30 ≤ CR4 or 40 ≤ CR8, the industry is oligopoly. Today, with the rapid updating of products, this definition has lost its meaning. In the "long tail" market of the Internet era, the total value of the unlimited niche market is not inferior to the popular products at the height of the sun. Products and services for specific small groups are also competitive, even if market share It is very big, but the level of competition in the industry is still high.

influence factor

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Influencing factors of industry concentration

There are some reasons that can lead to low industry concentration.

By product Essential attribute Determined

In the famous Porter's industrial competition theory, most of the scattered industries described are industries with low market concentration, and the products in these industries generally have one or more of the following Product attributes And characteristics:

(1) quality guarantee period Short term: such as Cakes and Pastries Industry and fresh food Dairy industry The warranty period of 1-5 days makes some ambitious Local enterprises There is no alternative. Danone Dairy has two production bases in Shanghai and Guangzhou. The company has excellent brand, management, talent and other comprehensive strength Leading products For "in Cold storage area Milk stored for 21 days Yogurt , restricted by product shelf life and refrigeration conditions, scope of business It can only shrink in the Yangtze River Delta and the Pearl River Delta, but is difficult to expand National market 。

(2) Storage and transportation costs are too expensive : e.g Barreled water and Ice cream Cold drinks industry, the former>5 - 10 yuan The factory price and the freight rate of about 1 yuan/barrel per hundred kilometers limit the regional expansion of most barreled water plants; The latter from refrigerated trucks cold store In the supermarket refrigerator, the storage and transportation investment is huge, and many local cold drink companies have to draw a tight line and live in a corner. In addition, some products are easy to be damaged, and their volume is too large, so the storage and transportation costs are too high, which is also important for the low market concentration influence factor

(3) The products are difficult to be produced in scale That is, the product cannot be copied quickly and cheaply, such as many Handicrafts , native products, and some industries in China Handmade workshop Stage, once there is something that can be mass produced mechanical equipment The industry pattern Possible Earth shaking changes.

(4) Restricted by raw material supply : The production base of some industrial products must be built around the location of raw materials, such as mineral water industry. Restricted by mineral water sources, a large number of enterprises are difficult to expand outside the region, which is an important reason for the low market concentration of this industry.

Determined by the comprehensive strength of manufacturers in the industry

(1) The comprehensive strength of manufacturers in the industry is generally strong : (The comprehensive strength defined here includes the overall strength of capital, management, marketing, talent and other core resources.) The market is full of dozens of brands with balanced strength. The competition for market share among brands is very fierce, but none of them is the best. For example, the toothpaste, soap, sanitary napkins and other industries in daily necessities are relatively mature. Most of the leading industries are joint-venture brands. These brands compete with each other, but none can stand out, resulting in low market concentration. In these industries, it is difficult to find large Market opportunities 。

(2) The comprehensive strength of manufacturers in the industry is generally weak : Some manufacturers in the industry are at a low level of competition, and the market is at a lower level of equilibrium. The manufacturers are unable (or unintentionally) to build strong brand , each living in a corner, Don't think Enterprising, leading to low market concentration in the industry. For example, the candy industry, the speculation industry Mustard tuber If you dig carefully, similar Segmented industries There are still many. After all, China is still in the market economy The initial stage of. In such industries, it is relatively easy to tap market opportunities.

from consumer demand Determined by the degree of diversification

Industry concentration is determined by the development stage of the bank

consumer demand It is a fact that people are becoming increasingly diversified, and the era of one thousand people is gone forever. In order to adapt to the diversified consumption demand of personality, consumers are divided into Market segmentation It is increasingly important, and products in some industries pay more attention to Segments 。 The more market segments, the lower market concentration, for example Cosmetics industry In Facial cleanser ， Body Lotion And other products.

from Emerging industries Where Development stage Determined

Many studies show that SMEs are technological innovation The main source of. Many new products (except those with patent monopoly) were born and developed from SMEs. However, the strength of small and medium-sized enterprises also determines that it is difficult to rapidly expand and occupy the market at the initial stage of the development of the new industry. On the contrary, it is very easy to form a competitive situation in which thousands of arrows are launched and thousands of sails are set to compete, thus affecting the market concentration. For example, in 2000 Thermal Underwear Due to the progress of science and technology, the thermal insulation performance of underwear materials has made breakthrough progress. Small and medium-sized enterprises with various backgrounds have started production. Almost overnight, more than 500 kinds of thermal underwear brands emerged in the market. Strong brands are difficult to stand out, and low market concentration is inevitable.

suffer planned economy Historical baggage and policy influence

In some industries, if they face the market completely, they may already be high market concentration industries, but due to the existence of local protection, artificial regions are created Competitive barrier , thus affecting the market concentration of some industries. For example, there are many local brands Beer , liquor and cigarette industry.

In reality, the low market concentration of some industries may be caused by the repeated accumulation of one or more of the above factors. The more influential factors, the more difficult it is to improve market concentration; Similarly, enterprises have a strong influence on factor analysis The more thorough, the more industry opportunities can be found, so as to improve the enterprise's own Market share 。

And market efficiency

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Industry Concentration and Corporate Control Market

so-called Corporate control Market refers to the collection of shares or votes dealership Obtain control over the enterprise to achieve takeover and replacement management layer From the micro level, through Corporate control market To replace the bad managers External threats stay Corporate governance structure Plays a very important role in. Manne (1965) pointed out in his pioneering paper that control power The existence of the market has greatly weakened the so-called separation of ownership and control. Fama (1980) also pointed out that even if there is only the possibility of takeover, low stock prices will also exert pressure on the management to change Behavior And loyal to the interests of shareholders. From a macro perspective, the market for corporate control is a national adjustment industrial structure , improve Industry structure Ruback (1983) and others have shown that mergers and acquisitions based on market principles are beneficial to Resource allocation Optimization of. Industry concentration is to evaluate the control right of the company Market efficiency Effective indicators. Industry concentration is an indicator to measure the concentration degree of an industry's output or market share to the industry's core enterprises. Generally, the top four enterprises in the industry account for the whole industry total output Or the proportion of market share.

The industry concentration of mature industries can reflect the efficiency of the corporate control market. The sign of a mature industry is the industry's excess supply capacity profit margin There is a downward trend and fierce competition in the industry. Only those with scale economy Effective enterprises can survive because they use relatively mature technologies, cost control It is decisive in enterprise competition, so SMEs often cannot compete with large enterprises. This situation leads to the further concentration of the market and output of the industry to large enterprises, which further improves the industry concentration.

The trend of market share concentration towards large enterprises in the industry will not continue indefinitely. The reason is that, first of all, any enterprise has its boundaries. Expansion beyond a certain scale may lead to Diseconomies of scale ； Secondly, for non natural monopoly industries, any country has some kind of anti-monopoly laws and regulations To prevent excessive monopoly social welfare Losses. The third is due to the industry core technology Caused by the upgrade of Game rules The market determined by cost may become the market determined by technology, and the entry of new enterprises may lead to the reversal of the trend of market distribution.

The reason to prevent excessive monopoly is that most industries in real life do not have the perfect competition advocated by textbooks market structure Although theoretically, this market structure is the most efficient. In real life, most of the market structures in mature industries are oligopolistic, that is, enterprises around the master monopolize half or more of the market share. In real life scale economy And Complete monopoly This kind of market structure is often not designed by a government. On the contrary, it is exactly the result of market selection and has been verified in different industries, such as the United States Automobile industry General Motors Ford and Chrysler , investment banking Merrill Lynch 、 Goldman Sachs and morgan stanley 。 And traditional Economic Theory The difference is that modern Industrial Organization Theory Proof: This Oligopoly The market structure of, Industrial Economics Master of University of Chicago Of Harold Demsetz (1973) pointed out that efficient enterprises can occupy a large market share, and Industrial concentration The good performance of excellent enterprises is due to efficiency rather than Market monopoly Caused by.

For a Oligopoly market For countries with structure (the word "universal" means in most industries), how did the market structure change from the existing state to the oligopoly market structure? There are two ways of transformation. One is through the Internal investment expand throughput At the same time, small enterprises reduce their production capacity through gradual contraction, which is certainly a way to transform into an oligopoly market structure, and this way does exist in real life. However, this way is difficult to become a mainstream way for the following reasons: First, small enterprises may not be willing to quit, Although at a disadvantage in the competition, the sales price is still higher than the production price Variable costs , or just based on the consideration of solving the employment problem (which may be the main reason why small enterprises are unwilling to quit in China), the contraction of small enterprises may be a long process. On the other hand, it may also be a long process for large enterprises to expand their production capacity and gradually expand their market share through internal investment, Market expansion The process may also be resisted by small businesses.

The other way is through the market of corporate control. In general, it is through the competition between the superior enterprises and the inferior enterprises M&A Or the strong merger between advantageous enterprises and advantageous enterprises has not been realized. Although in most cases, advantageous enterprises are also large enterprises in traditional industries, this is not always the case, because capital market The magic, small BMsiness Combinations Large enterprises also happen frequently, so here we replace the concept of large enterprises with competitive enterprises. From the international experience, the realization of oligopoly market structure purchase is mainly based on mergers and acquisitions rather than internal expansion or contraction of enterprises, which can be explained by the frequent financial and automotive industry mergers in recent years.

The above facts illustrate the following logic: that is, the oligopolistic market structure of mature industries is the inevitable result of market evolution, and the general formation of a country's oligopolistic market structure is mainly through the corporate control market. Here, in fact, an implicit assumption is made: assuming that the corporate control market is efficient, that is, if enterprise mergers If it is profitable (or a Parato optimization for the original situation), the merger will take place. Only in an efficient market of corporate control can the market spontaneously evolve into Oligopoly In other words, if the market for corporate control is inefficient, then the evolution of the market to the oligopoly market structure is so slow that the improvement of industry concentration in a country will be very slow and its overall level will be significantly different from the international general level. A conclusion derived from this is that the efficiency of the market for corporate control also determines the trend and level of industry concentration. Since the efficiency of the market for corporate control is unobservable and the industry concentration is observable, industry concentration can be used as a measure of corporate control Market efficiency Indicators of.

Considering that the market for corporate control is still essentially the marketization degree and Capital market efficiency The efficiency of the capital market has been divided uniformly in the world, so it still imitates the efficiency of the capital market classification method The market efficiency of corporate control is divided into three types, namely Strongly effective , medium strong effective and Weakly efficient The determination of relevant categories is based on the average industry concentration of mature industries in the country evaluation criterion The United States is a country with a high degree of marketization and focuses on playing the role of corporate control market, so it can be considered that the corporate control market in the United States is strong and effective. If the overall level of industry concentration in a mature industry in a country reaches or approaches the level of the United States, it can be considered that the corporate control market in that country is strong and effective.

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