Concentration: Measurements and Concentration: Measurements and TrendsTrends
Analysis of a firm’s competitive Analysis of a firm’s competitive environment requires identifying the key environment requires identifying the key elements of industry structureelements of industry structure
Number and size distribution of firmsNumber and size distribution of firms
Seller concentrationSeller concentration
Number of firms, size of firmsNumber of firms, size of firms
Market and Industry DefinitionMarket and Industry Definition
Product dimensionProduct dimension
Geographic dimensionGeographic dimension
Cross price elasticity of demandCross price elasticity of demand
Cross price elasticity of supplyCross price elasticity of supply
Geographic Market DefinitionGeographic Market Definition
Determines whether an increase in the Determines whether an increase in the price of a product in one geographic price of a product in one geographic location significantly affects either demand location significantly affects either demand or suupy in another locationor suupy in another location
If so, both locations should be considered If so, both locations should be considered samesame
Regional marketRegional market
Market vs IndustryMarket vs Industry
Market:S&DMarket:S&D
Industry – all products or enterprises with Industry – all products or enterprises with large long run cross elasticities either large long run cross elasticities either supply and demand should be combined supply and demand should be combined into a single industry. into a single industry.
Official SchemesOfficial Schemes
ISIC classificationISIC classification
NACE classificationNACE classification
Measures of ConcentrationMeasures of Concentration
Seller concentration: An indicator of the Seller concentration: An indicator of the number and size distribution of firms can number and size distribution of firms can be measured at two levels:be measured at two levels:– For all firms that form part of an economy For all firms that form part of an economy
located within some specific geographic located within some specific geographic boundaryboundary
– For all firms classified as members of some For all firms classified as members of some industry or market again located within some industry or market again located within some specific geographic boundaryspecific geographic boundary
Most Common measures of seler Most Common measures of seler concentrationconcentration
N firm concentration ratioN firm concentration ratio
The Herfindahl-Hirschman indexThe Herfindahl-Hirschman index
The Hannah-Kay indexThe Hannah-Kay index
The entropy coefficientThe entropy coefficient
The variance of the log of firm sizesThe variance of the log of firm sizes
GINIGINI
Trends in Industry ConcentrationTrends in Industry Concentration
Table 6.14 and 6.15: Specialization in Table 6.14 and 6.15: Specialization in European Manufacturing SectorEuropean Manufacturing Sector
Pattern of specialization across Pattern of specialization across industrialized world:industrialized world:– Europe: Specialize in traditional industries,Europe: Specialize in traditional industries,– Japan and US: Specialize in technology Japan and US: Specialize in technology
oriented industriesoriented industries
ClustersClusters
Table 6.15Table 6.15Industry cluster policies are a current trend Industry cluster policies are a current trend in planning for economic development.in planning for economic development.The focus of cluster policies is based on The focus of cluster policies is based on the recognition that firms and industries the recognition that firms and industries are interrelated.are interrelated.The idea is that ties among firms within The idea is that ties among firms within clusters might be turned into competitive clusters might be turned into competitive advantage for the region.advantage for the region.
Industry cluster policies are a current trend Industry cluster policies are a current trend in planning for economic development.in planning for economic development.
The focus of cluster policies is based on The focus of cluster policies is based on the recognition that firms and industries the recognition that firms and industries are interrelated.are interrelated.
The idea is that ties among firms within The idea is that ties among firms within clusters might be turned into competitive clusters might be turned into competitive advantage for the region.advantage for the region.
Cluster Number of Firms (1996)
Change in Number of Firms (1996-2000)
Employment (1996)
Change in Employment (1996-2000)
Engineering 3195 8,4 288534 10,8
Production and Processing of Field Crops
1093 -3,1 127881 -3,6
Stone Based Industry 1165 6,3 104104 7,9
Packaged foods and beverages
1286 -5,6 114507 0,6
Textile 3668 6,1 400747 10,3
Media and Communication
709 8,2 87302 9,8
Furniture 618 12,6 44864 26,2
Total 11734 5,1 1167939 8,3
Source: Akgungor, S. (2006). Geographic Concentrations in Turkey’s Manufacturing Industry”. Europen Planning Studies, vol 14, no.2 (forthcoming).
Industries With Close I-O Relationships in Turkey (Cluster Templates)
Engineering ClusterEngineering Cluster
Primary IndustriesPrimary IndustriesMining of metal oresMining of metal oresManufacture of ceramic productsManufacture of ceramic productsManufacture of basic iron and steelManufacture of basic iron and steelManufacture of basic precious and non-ferrous metalsManufacture of basic precious and non-ferrous metalsCasting of metalsCasting of metalsManufacture of fabricated metal products, tanks, reservoirs and steam generatorsManufacture of fabricated metal products, tanks, reservoirs and steam generatorsManufacture of other fabricated metal products; metal working service activitiesManufacture of other fabricated metal products; metal working service activitiesManufacture of general purpose machineryManufacture of general purpose machineryManufacture of special purpose machineryManufacture of special purpose machineryManufacture of domestic appliances n.e.c.Manufacture of domestic appliances n.e.c.Manufacture of electrical machinery and apparatus n.e.c.Manufacture of electrical machinery and apparatus n.e.c.Manufacture of motor vehicles, trailers and semi-trailersManufacture of motor vehicles, trailers and semi-trailers
Secondary IndustriesSecondary IndustriesExtraction of crude petroleum and natural gasExtraction of crude petroleum and natural gasManufacture of medical, precision and optical instruments, watches and clocksManufacture of medical, precision and optical instruments, watches and clocksBuilding and repairing of ships, pleasure and sporting boatsBuilding and repairing of ships, pleasure and sporting boatsManufacture of transport equipment n.e.c.Manufacture of transport equipment n.e.c.Manufacturing n.e.c.Manufacturing n.e.c.
Production and Processing of Production and Processing of Field CropsField Crops
Primary IndustriesPrimary IndustriesGrowing of cereals and other crops n.e.c.Growing of cereals and other crops n.e.c.Farming of animalsFarming of animalsAgricultural and animal husbandry service activities, except veterinary activitiesAgricultural and animal husbandry service activities, except veterinary activitiesManufacture of vegetable and animal oils and fatsManufacture of vegetable and animal oils and fatsManufacture of grain mill products, starches and starch productsManufacture of grain mill products, starches and starch productsManufacture of preparad animal feedsManufacture of preparad animal feedsManufacture of sugarManufacture of sugarManufacture of cocoa, chocolate, sugar confertionery and other food products n.e.c.Manufacture of cocoa, chocolate, sugar confertionery and other food products n.e.c.Manufacture of tobacco productsManufacture of tobacco productsManufacture of fertilizers and nitrogen compoundsManufacture of fertilizers and nitrogen compounds
Secondary IndustriesSecondary IndustriesManufacture of alcoholic beveragesManufacture of alcoholic beveragesManufacture of pesticides, other agro-chemicals and paints, varnishesManufacture of pesticides, other agro-chemicals and paints, varnishesManufacture of rubber productsManufacture of rubber products
Stone-Based IndustryStone-Based IndustryPrimary Industries Primary Industries
Mining of coal and ligniteMining of coal and ligniteExtraction of crude petroleum and natural gasExtraction of crude petroleum and natural gasQuarrying of stone, sand and clayQuarrying of stone, sand and clayMining and quarrying n.e.c.Mining and quarrying n.e.c.Manufacture of pesticides, other agro-chemicals and paints, varnishesManufacture of pesticides, other agro-chemicals and paints, varnishesManufacture of glass and glass productsManufacture of glass and glass productsManufacture of ceramic productsManufacture of ceramic productsManufacture of cement, lime and plaster related articles these itemsManufacture of cement, lime and plaster related articles these itemsCutting and finishing of stone and man. of other non-metallic mineral products n.e.c.Cutting and finishing of stone and man. of other non-metallic mineral products n.e.c.
Secondary IndustriesSecondary IndustriesForestry, logging and related service activitiesForestry, logging and related service activitiesFishingFishingMining of metal oresMining of metal oresManufacture of basic chemicals, plastics in primary forms and os synthetics rubberManufacture of basic chemicals, plastics in primary forms and os synthetics rubberManufacture of rubber productsManufacture of rubber productsBuilding and repairing of ships, pleasure and sporting boatsBuilding and repairing of ships, pleasure and sporting boats
Packaged Food Products and Packaged Food Products and BeveragesBeverages
Primary IndustriesPrimary IndustriesFishingFishingProduction, processing and preserving of meat and meat productsProduction, processing and preserving of meat and meat productsProcessing and preserving of fruit and vegetablesProcessing and preserving of fruit and vegetablesManufacture of dairy productsManufacture of dairy productsManufacture of bakery productsManufacture of bakery productsManufacture of alcoholic beveragesManufacture of alcoholic beveragesManufacture of soft drinks; production of mineral watersManufacture of soft drinks; production of mineral waters
Secondary IndustriesSecondary IndustriesGrowing of vegetables, horticultural specialties and nursery productsGrowing of vegetables, horticultural specialties and nursery productsProcessing and preserving of fish and fish productsProcessing and preserving of fish and fish productsManufacture of cocoa, chocolate, sugar confertionery and other food Manufacture of cocoa, chocolate, sugar confertionery and other food products n.e.c.products n.e.c.PublishinPublishingg
TextileTextile
Primary IndustriesPrimary IndustriesManufacture of textilesManufacture of textilesManufacture of other textilesManufacture of other textilesManufacture of knitted and crocheted fabrics and articlesManufacture of knitted and crocheted fabrics and articlesManufacture of wearing apperel, except fur apparelManufacture of wearing apperel, except fur apparelManufacture of basic chemicals, plastics in primary forms and of Manufacture of basic chemicals, plastics in primary forms and of synthetic rubbersynthetic rubberManufacture of cleaning materials, cosmetics and other chemicals Manufacture of cleaning materials, cosmetics and other chemicals and man-made fibresand man-made fibres
Secondary IndustriesSecondary IndustriesAgricultural and animal husbandry service activities, except Agricultural and animal husbandry service activities, except veterinary activitiesveterinary activitiesManufacture of plastic productsManufacture of plastic productsManufacture of glass and glass productsManufacture of glass and glass products
FurnitureFurniture
Primary IndustriesPrimary IndustriesForestry, logging and related service activitiesForestry, logging and related service activitiesSawmilling and planing of woodSawmilling and planing of woodManufacture of wood and of products of wood and corkManufacture of wood and of products of wood and corkManufacture of furnitureManufacture of furniture
Secondary IndustriesSecondary IndustriesManufacture of cocoa, chocolate, sugar confertionery Manufacture of cocoa, chocolate, sugar confertionery and other food products n.e.c.and other food products n.e.c.Manufacture of coke, refined petroleum produtcsManufacture of coke, refined petroleum produtcsManufacture of rubber productsManufacture of rubber products
Regional SpecialisationsRegional Specialisationsİstanbul -
İzmir Stone-based industry
Çukurova Textile
Ankara and Kırıkkale
EngineeringFurniture
Ankara Region Production and processing of field cropsStone-based industry
Kayseri Furniture
Gaziantep Textile
Konya EngineeringProduction and processing of field crops
Samsun Production and processing of field crops
Eskişehir EngineeringStone-based industryPackaged food and beverages