Impact of the market concentration on trading chains' performance in Serbia

Abstract

The aim of the paper is testing the difference between the market share of three leading acquired chains and the three leading domestic trading chains in Serbia, as well as the analysis of performance between these two groups of trading chains in the period 2011-2015. Performance of trading chains is measured by profitability, liquidity and leverage indicators. Results of t-test indicate that there is a significant difference between the market share of analyzed trading chains. The analysis of the difference between observed trading chains has shown that there is a significant difference only in the trend of profitability. The correlation analysis between market share and profitability, shows that acquired trading chains with higher market share have lower profitability.

Characteristics of the Supply Chain of Tobacco and Tobacco Products: Evidence from Serbia

“…The results of the panel regression analysis demonstrate that the changes in the level of concentration measured by the HHI have a significant and negative effect on the performance of firms in terms of profitability. These results are in accordance with previous research conducted on Serbian markets [27,28]. This relationship may be based on particular circumstances.…”

“…The research indicated a reverse relationship between the market share and performance indicators of prominent tobacco-producing firms in the Republic of Serbia. Mirović et al [28] examined the disparity in market share between the top three acquired chains and the top three local retail chains in Serbia and concluded that trading chains that obtain a greater market share through acquisition tend to gain reduced profitability rates. The market concentration of agricultural enterprises in Vojvodina, which is an autonomous provincial republic of Serbia, was analyzed by Pjanić et al [29].…”