Appropriate Measures of Product Market Competition for Developing Countries

Competition measures are categorized into two major groups, including structural and non-structural measures. Although estimating structural indicators is simple, it requires information relative to market share or the number of firms in the market that are often unavailable in developing countries. In contrast, non-structural measures may be more appropriate for estimating competition in developing economies. Non-structural indicators do not impose stringent data requirements (i.e., market share and defining relevant markets). They require information regarding business results, and even in some cases, they do not need product price information (i.e., Boone indicator and Rent index). Among the non-structural measures, the Boone indicator may be the most suitable one since it has more advantages than the non-structural metrics. Besides, it is estimated by simple linear econometrics, thereby calculating and interpreting easily