What is the hirfindahl-hirschman index, Corporate Finance

Assignment Help:

What is the Hirfindahl-Hirschman Index?

A:
The Hirfindahl-Hirschman Index, or HHI, is the standard measure used by economists to evaluate market concentration. The greater the level of concentration among competitors, the higher the HHI. The HHI runs on a scale from zero (representing extreme competitiveness) to 10,000 (representing monopoly). The HHI is determined by squaring (multiplying by itself) the market share of each firm in a market, and then adding up the results. The example below illustrates this calculation.

Example Calculation for a Hypothetical Market With HHI of 2,000

Competitor

Market Share %

HHI

Bank #1

29

841

Bank #2

24

576

Bank # 3

19

361

Bank # 4

10

100

Bank # 5

10

100

Bank # 6

4

16

Bank # 7

2

4

Bank # 8

1

1

Bank # 9

1

1

Total Market

100

2,000

(Hirfindahl-Hirschman Index Source: Federal Reserve)

 

 


Related Discussions:- What is the hirfindahl-hirschman index

IRR, A firm issues bonds with a coupon rate of 10%, paid annually, having a...

A firm issues bonds with a coupon rate of 10%, paid annually, having a par value of 1000, YTM of 8% and maturity of 10 years. What is the IRR of buying the bond today and selling

Cost of capital, i have a project due on the cost of capital for a specific...

i have a project due on the cost of capital for a specific company 3500 word limit, can you help me

Capital structure, What the implications of the pecking order theory?

What the implications of the pecking order theory?

Prepare a memo and journal, 1. You are working as an accountant for ABC Gro...

1. You are working as an accountant for ABC Group Ltd. Your directors have asked you to prepare the necessary consolidation journal entries for the year ended 30 June 2009 (Narrati

Valuation as determined by a multiple of EBITDA, is cash considered to be a...

is cash considered to be additive to this method of valuation?

WACC, WACC calculation

WACC calculation

Bond valuation, An investor buys a French government, 10-year bond, paying ...

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

Do managers really look after the interest of shareholders, Question: "...

Question: "The separation of ownership and control of a corporate firm has given rise to what is called ‘a positive and normative divide' in explaining managerial behaviour. F

Homework Help, Look back to Section 13–1 (Table 13.2 on p. 329). Suppose th...

Look back to Section 13–1 (Table 13.2 on p. 329). Suppose that Ms. Macbeth’s investment bankers have informed her that since the new issue of debt is risky, debt holders will deman

571, Trevor Price bought 10-year bonds issued by Harvest Foods five years a...

Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $936.05. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd