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The Critical Choice Between the Concentration Ratio and the H-Index in Assessing Industry Performance
Leo Sleuwaegen and Wim Dehandschutter
The Journal of Industrial Economics
Vol. 35, No. 2 (Dec., 1986), pp. 193-208
Published by: Wiley
Stable URL: http://www.jstor.org/stable/2098358
Page Count: 16
You can always find the topics here!Topics: H index, Industrial concentration ratios, Industrial concentration, Concentration ratio, Industrial economics, Profitability ratios, Profitability index, Low concentrations, Goodness of fit, Statistical models
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The paper shows that in addition to the theoretical relevance of choosing between the Hirschman-Herfindahl index and the concentration ratio, both measures may provide empirically very different information to assess industry performance. It is shown that the correspondence between the two measures can be represented by a horn-shaped figure. The implications of this horn-shaped relationship are investigated in the context of specifying empirical profitability-concentration models. Among different specification effects tested, it is shown that the neglect of the horn-relationship may bias the results towards the identification of a critical concentration ratio.
The Journal of Industrial Economics © 1986 Wiley