An Analysis of Market Concentration in the Korean Liner Shipping Industry

AbstractKorean shipping companies have seriously contemplated on pursuing economies of scale in order to tap the potential that Korea can generate for the seaborne cargo volume and fleet capacity, despite of latent pros and cons associated with the economies of scale. This paper shows the concentration ratio of the top four liner shipping companies in Korea is well below that of the global counterpart. Additionally, the changes of CR4 between 1992 and 2004 indicate the Korean shipping market has become more competitive and less concentrated. The HH index that has been lowered over the same period also supports the same finding. In contrast, the global liner industry showed its market concentration ratio and the HH index increasing during the corresponding period