The Herfindahl-Hirschman Index (HHI) measures the concentration of a market or another distribution of economic activity. It is calculated by summing the squared market shares of all firms, exporters or other relevant units. Squaring gives greater weight to large shares, so the index rises as activity becomes concentrated among fewer participants. When shares are expressed as percentages, the HHI ranges from close to zero to 10,000; when expressed as fractions, it ranges from zero to one. In trade analysis, the index can describe the concentration of a country’s exports across firms, products or destination markets. Competition authorities also use it, among other indicators, when assessing market structure and the possible effects of mergers.
Passende Formel
Herfindahl-Hirschman-Index
Die Konzentration eines Marktes anhand quadrierter Marktanteile messen.
Variablen: si Marktanteil des Unternehmens i; n Zahl der Unternehmen.
Anwendung: Für Wettbewerbsanalyse, Marktstruktur und Fusionskontrolle.
Source: World Bank Open Data (source). This glossary entry was independently prepared from the cited open-data metadata; changes were made.