Market Concentration: Herfindahl-Hirschman Index score worldwide from 1988 to 2020

The Herfindahl-Hirschman Index (HHI) is a common measure of market concentration, which expresses how competitive a market is by looking at how many firms are able to compete in a given market. The index ranges between zero (perfectly competitive) and 10,000 (full monopoly), with a score of 1,500 to 2,500 considered to be a concentrated market, 2,500 and greater to be a highly concentrated market, and below 1,500 representing a competitive marketplace. HHI is used to judge the impact of mergers and acquisitions on market concentration, with the U.S. Department of Justice and Federal Trade Commission considering a merger transaction which results in a HHI increase of over 200 to need to be investigated for anti-competitive reasons. HHI is an aggregated index which does not account for particularities and complexities of market structure and should therefore be treated as a first approximation of market concentration. Since the late 1980s, the global HHI score has fallen considerably from almost 1600, to less than 450 in 2020.