Concentration, Competition and Efficiency of Companies in the Milk and Dairy Products Market in Bosnia and Herzegovina

Abstract

Abstract: This paper analyzes the milk and dairy products market in Bosnia and Herzegovina. It provides an overview of the current state of the market from the aspect of processing, production and foreign trade of Bosnia and Herzegovina with its important partners. The aim and subject of the paper is to determine the degree of concentration, as well as the impact of the degree of concentration on the efficiency and competition of companies in the milk and dairy products market in Bosnia and Herzegovina. The CRn index and the Herfindahl – Hirschman index were used to calculate the level of concentration in this market. The basic hypothesis in this research is that a low degree of concentration in the milk and dairy products market has a positive effect on the efficiency of the operations of companies in the milk and dairy products market in BiH. In order to more easily confirm or reject the main hypothesis, a subsidiary hypothesis was set: A low degree of concentration has a positive effect on the growth of competitive activities of companies and product differentiation. After conducting an analysis and measuring the level of concentration, it was determined that there has been a moderate level of concentration in recent years and that this contributes to greater competitiveness and efficiency of business operations of companies in the milk and dairy products market in BiH.