Examination of the commodity products available in the global financial markets using their market concentration levels

Subhakara Valluri

doi:10.18559/ref.2020.2.5

Authors

Subhakara Valluri Institute of Economics of the Polish Academy of Sciences, Poland https://orcid.org/0000-0002-4830-886X

DOI:

https://doi.org/10.18559/ref.2020.2.5

Keywords:

commodity exchanges, market concentration, commodty products

Abstract

The primary objective of this study is to find the disparities in the commodity product offerings in various financial markets across the world along with their market concentration levels. Identifying the product gaps in commodity-based financial products offered by the worldwide financial exchanges can assist the decision makers to fill the existing gaps strategically and attain the worldwide competitive market of commodity exchanges for all nations. The Hirschman-Herfindahl Index, HHI, is used to measure market concentration grouped by geographical regions or exchanges. The disparity analysis until 2016 indicates a disparity between commodity products traded in several exchanges across different geographical regions. Asia covers the largest regions of the world and showcasing 26 commodity exchanges located in different countries with 2689 types of commodity products traded among these exchanges. North America’s 18 commodity exchanges show 8157 product types. Europe has 8 exchanges located in different countries with 1712 product types registered across these exchanges. Our analysis on market volume concentration for regions indicates that for the period 2012-2016, contract volume growth has increased. and reflects a high concentration of volume among all the regions. Our analysis of market volume concentration for exchanges indicates a moderate level of market concentration for 2012-2016.

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