Changing industrial structure and competitive patterns of manufacturing and non-manufacturing in a small open economy: An entropy measurement

This paper studies the industrial concentration and competitive patterns of Hong Kong, a typical small open economy, via an entropy measurement. A relatively low degree of concentration was found to exist. Manufacturing showed decreasing concentration for 1976-81 and increasing concentration after 1987. Non-manufacturing had decreasing concentration since 1982. A structural change between the sectors had occurred. The size of the domestic market seemed unimportant in determining the level of concentration in a small open economy with free trade. The open-door policy of the PRC which facilitated free resource mobility and outward investment between the two regions should be important to contribute such patterns.