HHI Meaning and
Definition
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HHI stands for Herfindahl-Hirschman Index. It is a quantitative measure used to assess the concentration and competitiveness within a specific industry or market. The HHI helps indicate the level of competition by considering the market share of each participating firm, thus providing insights into the market structure and potential anticompetitive behavior.
The HHI is calculated by summing the squares of the market shares of all the firms operating in the market. Each firm's market share is represented as a percentage of total market sales. Therefore, the higher the HHI, the greater the market concentration, suggesting less competition and potentially higher market power for a small number of dominant firms.
HHI values can range from zero to 10,000, with lower values indicating a more competitive market and higher values indicating less competition. The U.S. Department of Justice uses the HHI as a guideline for assessing potential mergers or acquisitions. A post-merger HHI increase of 100 or more points in concentrated markets is deemed indicative of increased market power.
The HHI provides regulators, policymakers, and businesses with insights into the competitiveness of an industry or market, helping them make informed decisions about issues such as mergers, acquisitions, and potential antitrust violations. By analyzing the HHI, stakeholders can evaluate the level of market competition and identify potential inefficiencies or harmful practices that could negatively impact consumers.
Common Misspellings for HHI
- bhhi
- hbhi
- uhhi
- yhhi
- hyhi
- hhbi
- hhyi
- hhiu
- hhij
- hhki
- hhio
- hh9i
- hhi9
- hh8i
- hhi8
- hhhi
- h hi
- hh i
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