An Analysis of Market Concentration in the Korean Liner Shipping Industry

Ha, Yeong-Seok; Seo, Jung‐Soo

doi:10.1016/j.ajsl.2013.08.007

Cited by 11 publications

(4 citation statements)

References 12 publications

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“…A fairly common approach is to apply the CR 4 and HHI to the global container shipping market (see e.g., Goulielmos 2017 ; Luo et al 2014 ; Sys 2009 ). The same indicators are also applied in various studies that deal with specific liner shipping markets, for example on the main East–West trades (Hirata, 2017 ) and the Korean liner shipping industry (Ha & Seo, 2013 ). Specialised maritime consultants sometimes also made similar assessments.…”

Section: Existing Approaches and Their Limitationsmentioning

confidence: 99%

Alternative approaches to measuring concentration in liner shipping

Merk

Teodoro²

2022

Marit Econ Logist

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Shipping has always had a special relationship with competition law and economics. Even if special competition law regimes for the shipping industry continue to exist, most countries nowadays accept the notion that shipping markets should be more competitive. Competition authorities monitor this in a more or less regular fashion, with various market concentration indexes. The liner shipping industry is peculiar in its widespread cooperation schemes between carriers, in the form of vessel sharing agreements, also known as consortia. Carriers engage in cooperation with all of their major competitors in a system of consortia that is highly interlinked. This brings considerable risks of abuse of market power. Yet, the system of inter-linked consortia has never been systematically mapped, nor do competition authorities appear to monitor them. This article addresses this gap, by proposing alternative indicators, in addition to the traditional industry concentration indexes such as the Herfindahl–Hirschman Index (HHI), that take the reality of consortia into account. Here, five possible alternative indicators are considered: the market share of consortia and independent operators; the share of consortia exceeding market share thresholds; the industry market concentration of consortia; a modified HHI that takes consortia into account; and interlinkages between consortia. We analyse the current state of concentration of liner shipping on the basis of these indicators using a new and unique database that contains deployed ship capacity of container carriers on all of their liner services. Based on this dataset we provide an overview of differences in industry concentration across world regions and developments over time. Traditional indicators show an increase in industry concentration. For example, over the trade corridors to and from Northern Europe, the HHI scores in 2006 ranged from 604 to 2463, and from 1164 to 4882 in 2021. The alternative criteria show additional industry concentration. We show that in 2021, 704 out of more than 1500 agreements among carrier consortia had a combined market share of at least 30%, and 102 of them had a combined market share of at least 50%. We also observe that in 2021, the carriers active in alliances operated 85% of the consortia capacity. Although carriers that are in the same alliance operate most of these consortia, it is also noteworthy that carriers that are not in the same alliance operate a considerable part (24%) of the consortia. Our calculations of modified Herfindahl–Hirschman Index (MHHI)indexes that take consortia into account show that industry concentration is higher when consortia are taken into account: for example on the trade corridor Northern Europe-North America East Coast, the MHHI has reached the threshold of 2500 points, despite an HHI score of around 1500. In the conclusion of the article, we put forward ways in which these alternative indicators could be used by competition authorities.

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Section: Existing Approaches and Their Limitationsmentioning

confidence: 99%

Alternative approaches to measuring concentration in liner shipping

Merk

Teodoro²

2022

Marit Econ Logist

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“…CR4 used to determine the concentration degree of the four largest buyers in a market area, so it can be seen generally the strength balance of the bargaining position of farmers (sellers) against traders (buyers). According to Naldi & Flamini (2014) and Ha & Seo (2013), the CR 4 can be solved with the equation:…”

Section: Cr4 (Concentration Ratio For Biggest Four)mentioning

confidence: 99%

Potato Trading Based on Structure Conduct Performance (SCP) in the Centre of Vegetable Production at Central Java Indonesia

Pujiharto¹,

Wahyuni²

2020

RWE

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This study aims to examine potato trading based on Structure, Conduct, Performance (SCP) in the highland vegetable production centers of Central Java Province. Potato trading in highland vegetable production centers in Central Java province has been analyzed using Structure, Conduct, and Performance (SCP) techniques. The data was collected through a survey and observation. The market structure was analyzed by market share, the Herfindahl-Hirschman Index (HHI) and the Concentration Ratio for Biggest Four (CR4). Analysis of market behavior includes the presence or absence of collusive practices in determining prices, the process of selling and buying, the formation of equilibrium prices, payment systems (cash, credit), and cooperation with other trading institutions. While market performance is analyzed by marketing margins and farmer's share. The samples of potato farmers were determined by the random sampling method and the traders determined by the snowball sampling method. The number of samples used was 82 potato farmers, 45 collecting traders, 10 wholesaling traders, and 14 retailing traders. The results of market structure research on potato trading are oligopsonies. Price behavior at farmers (producer) level is more controlled by collectors who deal directly with farmers. Wholesalers dominate purchases from collectors, the payments are made in cash or paid later. Moreover, the collusive practice between collectors and wholesalers occurs, especially in the provision of capital or credit. Furthermore, the performance of the potato market based on the trading system margin is greatest in pattern 2, while the farmer’s share is greatest in pattern 1 in the potato trading system.

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“…Morover, the changes of CR4 between 1992 and 2004 indicated the Korean shipping market became more competitive and less concentrated. (Ha and Seo, 2013). Nurwati (2014) investigated the relationship of market structure and performance for Indonesian Islamic Banks between the years 1999 and 2011.…”

Section: Literature Reviewmentioning

confidence: 99%

A Concentration Analysis In The Turkish Domestic Air Transporation Industry using with CRm and Herfindahl-Hirschman Indexes

Yaşar¹,

Kiracı²,

Kayhan³

et al. 2017

Gaziantep University Journal of Social Sciences

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Concentration means that economic activities are dominated or owned by a small number of firms in any market. Accordingly, there is a negative relationship between concentration ratio in the market and level of competition. In other words, as the concentration rate increases, level of competition decreases and vice-versa. The low market concentration ratio and imperfect competition are common occurences in the emerging countries such as Turkey. In this study, concentration ratio and level of competition of the top five airports in Turkey will be examined by years. In this context, the airlines' (using these top five airports) number of passengers and cargo volumes between 2012 and 2015 will be used to analyse. This study is significant as it is the first study to investigate airport market concentration and market structure in Turkey. In this context, the relationship between domestic air transportation concentration ratio and market structure will be demonstrated with using M-Firm Concentration Ratio (CRm) and Herfindahl-Hirschman Index (HHI) analysis methods. After the analyses, our results justified that market structure is far from competition. In addition, there are recommendations and determinations to what to do for ensuring competition and maintaining it truly in this study. ÖzYoğunlaşma, herhangi bir piyasada ekonomik faaliyetlerin az sayıda firmanın domine edilmesi ya da sahiplenilmesi anlamında kullanılmaktadır. Buna göre piyasadaki yoğunlaşma oranı ile rekabet düzeyi arasında negatif yönlü bir ilişki söz konusudur. Diğer bir ifade ile piyasadaki yoğunlaşma oranı artıkça rekabet düzeyi azalır, yoğunlaşma oranı azaldıkça rekabet düzeyi artar. Türkiye gibi gelişmekte olan ülke piyasalarında piyasa yoğunlaşma oranın düşük olması ve eksik rekabet sık rastlanılan bir durumdur. Bu çalışma kapsamında Türkiye'deki faaliyet gösteren en büyük beş havalimanının piyasadaki yoğunlaşma oranı ve rekabet düzeyi incelenecektir. Bu kapsamda söz konusu havaalanlarını kullanan havayolu işletmelerinin 2012-2015 yılları arasında bu havaalanlarındaki yolcu sayıları ve kargo miktarları incelenecektir. Bu çalışma Tükiye'deki havalimanlarında pazar yoğunlaşması ve piyasa yapısını inceleyen ilk araştırma olması nedeniyle önemlidir. Türkiye'de havacılık piyasasında yoğunlaşma ve piyasa yapısı arasındaki ilişki M -Firma Yoğunlaşma Oranı ve Herfindahl-Hirschman Endeksi Analiz yöntemleri kullanılarak iç hat hava taşımacılığındaki piyasa yapısının durumu ortaya konmaya çalışılacaktır. Yapılan analizler sonucunda piyasanın rekabetçi yapıdan uzak olduğu ortaya çıkarılmıştır. Buna ek olarak çalışmada rekabetin sağlanması ve sağlıklı bir şekilde işlemesine yönelik yapılması gerekenlerle ilgili tespit ve öneriler yer alacaktır.

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An Analysis of Market Concentration in the Korean Liner Shipping Industry

Cited by 11 publications

References 12 publications

Alternative approaches to measuring concentration in liner shipping

Alternative approaches to measuring concentration in liner shipping

Potato Trading Based on Structure Conduct Performance (SCP) in the Centre of Vegetable Production at Central Java Indonesia

A Concentration Analysis In The Turkish Domestic Air Transporation Industry using with CRm and Herfindahl-Hirschman Indexes

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