Accounting & Taxation, Vol. 2, No. 1, pp. 59-69, 2010
11 Pages Posted: 30 Jun 2011
Date Written: 2010
We study how different measures of market concentration explain investment decisions of Mexican manufacturing firms. The Herfindahl-Hirschman Index is the traditional measure of market structure concentration. The Dominance Index is a competition measure used by Mexican regulators. The econometric assessments suggest that investment decisions of Mexican firms can be better explained by the Dominance Index than by the Herfindahl-Hirschman Index. Thus our results suggest that the Mexican Dominance Index might be useful as a measure of market structure and competition. The results also suggest that market concentration reduces investment. These conclusions are based on several econometric assessments.
Keywords: Dominance Index, Herfindahl-Hirschman Index, Investment, Mexico, Manufacturing
JEL Classification: L40, L22, L60
Suggested Citation: Suggested Citation
Ruiz Porras, Antonio and López-Mateo, Celina, Market Concentration Measures and Investment Decisions in Mexican Manufacturing Firms (2010). Accounting & Taxation, Vol. 2, No. 1, pp. 59-69, 2010. Available at SSRN: https://ssrn.com/abstract=1869191