Market structure and concentration ratio: evidence of it companies in Hungary
Market structure and concentration ratio: evidence of it companies in Hungary

Summary/Abstract: The high numbers of Information technology (It) companies in Hungary may correlate with their market share. the number of existing companies may create a market structure and high levels of concentration. therefore the purpose of this research is to analyse the market structure and concentration of It companies in Hungary. Data used in this research is secondary data, and the tools of analysis used are the Hirschman-Herfindahl Index (HHI) and concentration ratio (cr). the results suggest that the type of market structure of It companies in Hungary can be categorised as an oligopoly with low concentration. It follows that there is no leading company on the It market. Here the findings indicate that telecommunication providers are deemed to be leaders in the It industry in Hungary. In the oligopoly market, the strategy of a telecommunication provider would influence other competitors to set the price and differentiate their services. In addition, the government may stimulate the development of It companies by imposing a differentiated tax.

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