Changes in Industrial Concentration in the Croatian Economy (1995-2006)

The aim of this paper is to obtain a better understanding of differences and dynamics of concentration across various industries in the Croatian economy in the period 1995-2006 in order to be able to foresee future trends. Shifts in concentration vary across industries in the Croatian economy. Concentration declines in approximately two fifths of the Croatian economy whereas one fifth of the Croatian economy shows a growing trend in concentration. In the remaining industries no changes in concentration occurred. The causes of concentration are as follows: (1) decline in concentration due to inadequate adjustments of leading firms to transition, (2) decline in concentration due to deregulation, (3) increase in concentration in industries targeted by multinational companies, and (4) increase in concentration in industries in which no significant new firms emerged following the unsuccessful privatization of leading firms.