The Fall and Rise of Market Power in Europe

26 Pages Posted: 27 Jan 2018  

John P. Weche

Monopolies Commission

Achim Wambach

Centre for European Economic Research (ZEW)

Date Written: 2018

Abstract

This paper presents an analysis of the recent developments of average market power in Europe by using a broad firm-level database for EU member states. To indicate competitive pressure at the firm-level, markups are estimated following De Loecker (2011), and De Loecker and Warzynski (2012). The analysis reveals a sharp drop in markups during the crisis, followed by a post-crisis increase. The European average has not yet reached its pre-crisis level, which is in contrast to results for the US, where average markups have climbed to pre-crisis levels already in 2011. There is significant heterogeneity among European economies and the pre-crisis levels do have been exceeded in some countries.

Keywords: Market Power, Markups, Europe, Crisis

JEL Classification: E2, D2, D4, L1

Suggested Citation

Weche, John P. and Wambach, Achim, The Fall and Rise of Market Power in Europe (2018). ZEW - Centre for European Economic Research Discussion Paper No. 18-03. Available at SSRN: https://ssrn.com/abstract=3109442 or http://dx.doi.org/10.2139/ssrn.3109442

John P. Weche (Contact Author)

Monopolies Commission ( email )

Adenauerallee 133
Bonn, 53113
Germany

Achim Wambach

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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