Modified Herfindahl-Hirschman Index for Measuring the Concentration Degree of Container Port Systems

In the evolution of the container port system, "concentration" has been highlighted in both shipping practices and the literature. However, existing concentration measures such as the Herfindahl-Hirschman Index (HHI) cannot appropriately be used to measure the degree of concentration of port markets. This paper aims to develop a standardized index for measuring the concentration degree of container port systems on a country level. The geo-economic concentration index, a modified HHI that considers competitive interactions between ports by incorporating geographical and economic characteristics of countries, is presented. The developed index was applied to 10 selected port systems to examine how their concentration degree changed from 1975 to 2007. The results show that the modified HHI can better reflect the concentration degree of port systems than the conventional HHI.