A statistical regularity

Many authors have observed that the ranking of industries by concentration level tends to be closely similar from one country to another: an industry that is dominated by a handful of firms in one country is likely to be dominated by a handful of firms elsewhere too. This ‘statistical regularity’ has occasioned a wide range of response in the literature. The large majority of studies argue in favour of the existence of such a regularity and interpret it as a reflection of the fact that the pattern of technology and tastes that characterize a given market may be expected to be similar across different countries. For this reason, the industry's equilibrium structure may in turn be similar from one country to another. While some authors have regarded this similarity of structure as rather trivial and of little interest, many, if not most, authors have seen it as providing considerable encouragement for the view that the underlying pattern of technology and tastes strongly constrains equilibrium structure (Scherer, 1980; Caves, 1989; Connor, et al., 1985).

Closely related to this empirical regularity is an important strand in the traditional literature on industrial structure, which aims to explain differences in concentration across industries by reference to a small number of candidate explanatory variables that are taken to reflect basic industry characteristics.