Article ID Journal Published Year Pages File Type
1009442 International Journal of Hospitality Management 2014 4 Pages PDF
Abstract

Previous studies have suggested that the Herfindahl–Hirschman Index (HHI) does not adequately account for market structure. To remedy this problem, this article further decomposes the HHI into two components: the number of competitors and market share inequality. Using the metropolitan-level data of tourist hotels in Taiwan, this article estimates the effect of these variables on hotels’ profits. This article shows that while a single measure of the HHI does not have a significant effect on hotels’ profits, decomposing HHI leads to different results. It shows that increasing the number of competitors may improve hotels’ profitability, and by contrast, greater inequalities in market shares may be detrimental to the profit in the room market.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Strategy and Management
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