Macroeconomic Effects of Market Structure Distortions: Evidence from French Cartels

85 Pages Posted: 7 Jun 2022

See all articles by Flavien Moreau

Flavien Moreau

International Monetary Fund (IMF)

Ludovic Panon

Bank of Italy

Date Written: May 1, 2022

Abstract

We provide systematic evidence on cartels’ characteristics, using novel data on cases investigated by the French Competition Authority. These practices are widely spread across sectors and cartel members are typically among the top firms in their industries. In a model with heterogeneous firms and collusion, cartels amplify misallocation by charging supracompetitive markups. Breaking down French cartels would increase aggregate productivity by 2%, welfare by 3.5%, bringing the economy 37% closer to the efficient frontier. These numbers shed light on the aggregate importance of collusion.

Keywords: Competition, cartels, collusion, welfare, misallocation

JEL Classification: D43, K21, L13, L41, O47

Suggested Citation

Moreau, Flavien and Panon, Ludovic, Macroeconomic Effects of Market Structure Distortions: Evidence from French Cartels (May 1, 2022). IMF Working Paper No. 2022/104, Available at SSRN: https://ssrn.com/abstract=4129569

Flavien Moreau (Contact Author)

International Monetary Fund (IMF) ( email )

Kuwait

Ludovic Panon

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

HOME PAGE: http://https://sites.google.com/site/ludovicpanon/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
39
Abstract Views
166
PlumX Metrics