Necessary and sufficient conditions in merger control: The use of HHI and threshold value

Document type: Journal Articles
Article type: Review
Peer reviewed: Yes
Author(s): Christoper McIntosh, Stefan Hellmer
Title: Necessary and sufficient conditions in merger control: The use of HHI and threshold value
Journal: Applied Economics
Year: 2012
Volume: 44
Issue: 7
Pagination: 867-878
ISSN: 0003-6846
Publisher: Taylor & Francis
URI/DOI: 10.1080/00036846.2010.524632
ISI number: 000301534900006
Organization: Blekinge Institute of Technology
Department: School of Management (Sektionen för management)
School of Management S- 371 79 Karlskrona
+46 455 38 50 00
http://www.bth.se/mam/
Language: English
Abstract: This article considers two coarse measures applicable to antitrust policy: one of market concentration, the Herfindahl-Hirschman Index (HHI) and one of market dominance, threshold value. Calculations of threshold value are compared to HHI values to determine when thresholds might be of specific use in merger cases. Many scenarios which satisfy the threshold conditions (indicating a dominant firm exists) are consistent with high HHI numbers such that current US Department of Justice and European Commission guidelines (based on HHIs) for merger concerns will have been met. It is suggested as a rule of thumb that HHIs be used as necessary conditions and threshold value be considered sufficient conditions for further case review.
Subject: Business Administration\International Business
Keywords: firm size, industrial enterprise, market conditions, merger
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