The Bureau’s study also calculates the Hirschman-Herfindahl Index of market power (HHI) which uses the market shares of all firms in an industry, not just those in a particular group. [...] Recent proposed amendments to the merger provisions of the Competition Act are in this spirit; for example, the government proposes abolishing s.92(2), which currently disallows an order against a merger on the basis of concentration or market share alone. [...] The first study of concentration in Canada to use Statistics Canada’s linked databases reported that, for the period 1970-79, 132 of the 167 Canadian manufacturing industries remained in the same CR4 class and 135 had remained in the same HHI class. [...] The Bureau’s study examines the extent to which the 10 largest firms in an industry were in the top 10 for three prior years and reports that such “rank stability” has increased across all industries. [...] A significant decline in the market share of a firm in the top 10 may not suffice to move it out of that category.
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