This document discusses industry concentration and trends. It begins by defining key elements for analyzing industry structure, including the number and size of firms and seller concentration. It also defines product and geographic dimensions for market and industry definition. Several common measures of seller concentration are described, including concentration ratios and the Herfindahl-Hirschman Index. The document presents data on trends in European manufacturing concentration and discusses industry clusters. It provides examples of industry cluster templates for key clusters in Turkey, including engineering, food production, textiles and others. It concludes by discussing regional specialization patterns across Turkey.

1. IndustriesIndustries

2. Concentration: Measurements andConcentration: Measurements and
TrendsTrends
Analysis of a firm’s competitive
environment requires identifying the key
elements of industry structure
Number and size distribution of firms
Seller concentration
Number of firms, size of firms

3. Market and Industry DefinitionMarket and Industry Definition
Product dimension
Geographic dimension
Cross price elasticity of demand
Cross price elasticity of supply

4. Geographic Market DefinitionGeographic Market Definition
Determines whether an increase in the
price of a product in one geographic
location significantly affects either
demand or suupy in another location
If so, both locations should be considered
same
Regional market

5. Market vs IndustryMarket vs Industry
Market:S&D
Industry – all products or enterprises
with large long run cross elasticities
either supply and demand should be
combined into a single industry.

6. Official SchemesOfficial Schemes
ISIC classification
NACE classification

7. Measures of ConcentrationMeasures of Concentration
Seller concentration: An indicator of the
number and size distribution of firms can
be measured at two levels:
◦ For all firms that form part of an economy
located within some specific geographic
boundary
◦ For all firms classified as members of some
industry or market again located within some
specific geographic boundary

8. Most Common measures of selerMost Common measures of seler
concentrationconcentration
N firm concentration ratio
The Herfindahl-Hirschman index
The Hannah-Kay index
The entropy coefficient
The variance of the log of firm sizes
GINI

9. Figure 6.1 The Lorenz curve

10. Trends in Industry ConcentrationTrends in Industry Concentration
Table 6.14 and 6.15: Specialization in
European Manufacturing Sector
Pattern of specialization across
industrialized world:
◦ Europe: Specialize in traditional industries,
◦ Japan and US: Specialize in technology
oriented industries

11. ClustersClusters
Table 6.15
Industry cluster policies are a current
trend in planning for economic
development.
The focus of cluster policies is based on
the recognition that firms and industries
are interrelated.
The idea is that ties among firms within
clusters might be turned into competitive
advantage for the region.

12. Industry cluster policies are a current
trend in planning for economic
development.
The focus of cluster policies is based on
the recognition that firms and industries
are interrelated.
The idea is that ties among firms within
clusters might be turned into competitive
advantage for the region.

13. Cluster Number of Firms
(1996)
Change in Number
of Firms (1996-
2000)
Employment
(1996)
Change in
Employment
(1996-2000)
Engineering 3195 8,4 288534 10,8
Production and
Processing of Field
Crops
1093 -3,1 127881 -3,6
Stone Based Industry 1165 6,3 104104 7,9
Packaged foods and
beverages
1286 -5,6 114507 0,6
Textile 3668 6,1 400747 10,3
Media and
Communication
709 8,2 87302 9,8
Furniture 618 12,6 44864 26,2
Total 11734 5,1 1167939 8,3
Source: Akgungor, S. (2006). Geographic Concentrations in Turkey’s Manufacturing Industry”.
Europen Planning Studies, vol 14, no.2 (forthcoming).
Industries With Close I-O Relationships in Turkey (Cluster Templates)

14. Engineering ClusterEngineering Cluster
Primary Industries
 Mining of metal ores
 Manufacture of ceramic products
 Manufacture of basic iron and steel
 Manufacture of basic precious and non-ferrous metals
 Casting of metals
 Manufacture of fabricated metal products, tanks, reservoirs and steam generators
 Manufacture of other fabricated metal products; metal working service activities
 Manufacture of general purpose machinery
 Manufacture of special purpose machinery
 Manufacture of domestic appliances n.e.c.
 Manufacture of electrical machinery and apparatus n.e.c.
 Manufacture of motor vehicles, trailers and semi-trailers
Secondary Industries
 Extraction of crude petroleum and natural gas
 Manufacture of medical, precision and optical instruments, watches and clocks
 Building and repairing of ships, pleasure and sporting boats
 Manufacture of transport equipment n.e.c.
 Manufacturing n.e.c.

15. Production and Processing of FieldProduction and Processing of Field
CropsCrops
Primary Industries
 Growing of cereals and other crops n.e.c.
 Farming of animals
 Agricultural and animal husbandry service activities, except veterinary activities
 Manufacture of vegetable and animal oils and fats
 Manufacture of grain mill products, starches and starch products
 Manufacture of preparad animal feeds
 Manufacture of sugar
 Manufacture of cocoa, chocolate, sugar confertionery and other food products
n.e.c.
 Manufacture of tobacco products
 Manufacture of fertilizers and nitrogen compounds
Secondary Industries
 Manufacture of alcoholic beverages
 Manufacture of pesticides, other agro-chemicals and paints, varnishes
 Manufacture of rubber products

16. Stone-Based IndustryStone-Based IndustryPrimary Industries
 Mining of coal and lignite
 Extraction of crude petroleum and natural gas
 Quarrying of stone, sand and clay
 Mining and quarrying n.e.c.
 Manufacture of pesticides, other agro-chemicals and paints, varnishes
 Manufacture of glass and glass products
 Manufacture of ceramic products
 Manufacture of cement, lime and plaster related articles these items
 Cutting and finishing of stone and man. of other non-metallic mineral products n.e.c.
Secondary Industries
 Forestry, logging and related service activities
 Fishing
 Mining of metal ores
 Manufacture of basic chemicals, plastics in primary forms and os synthetics rubber
 Manufacture of rubber products
 Building and repairing of ships, pleasure and sporting boats

17. Packaged Food Products andPackaged Food Products and
BeveragesBeverages
Primary Industries
 Fishing
 Production, processing and preserving of meat and meat products
 Processing and preserving of fruit and vegetables
 Manufacture of dairy products
 Manufacture of bakery products
 Manufacture of alcoholic beverages
 Manufacture of soft drinks; production of mineral waters
Secondary Industries
 Growing of vegetables, horticultural specialties and nursery products
 Processing and preserving of fish and fish products
 Manufacture of cocoa, chocolate, sugar confertionery and other food
products n.e.c.
 Publishing

18. TextileTextile
Primary Industries
 Manufacture of textiles
 Manufacture of other textiles
 Manufacture of knitted and crocheted fabrics and articles
 Manufacture of wearing apperel, except fur apparel
 Manufacture of basic chemicals, plastics in primary forms and of
synthetic rubber
 Manufacture of cleaning materials, cosmetics and other chemicals and
man-made fibres
Secondary Industries
 Agricultural and animal husbandry service activities, except veterinary
activities
 Manufacture of plastic products
 Manufacture of glass and glass products

19. FurnitureFurniture
Primary Industries
 Forestry, logging and related service activities
 Sawmilling and planing of wood
 Manufacture of wood and of products of wood and
cork
 Manufacture of furniture
Secondary Industries
 Manufacture of cocoa, chocolate, sugar confertionery
and other food products n.e.c.
 Manufacture of coke, refined petroleum produtcs
 Manufacture of rubber products

20. Regional SpecialisationsRegional Specialisations
İstanbul -
İzmir Stone-based industry
Çukurova Textile
Ankara and
Kırıkkale
Engineering
Furniture
Ankara Region Production and processing of field crops
Stone-based industry
Kayseri Furniture
Gaziantep Textile
Konya Engineering
Production and processing of field crops
Samsun Production and processing of field crops
Eskişehir Engineering
Stone-based industry
Packaged food and beverages

21. Figure 6.2 Diamond framework of competitive advantage
Source: Adapted from Porter (1990), figure 3.1, p. 72.

22. Prepares By:- Sanyam Gandotra
Class:-8th
B
Roll No.:-31