Concentration and Competition: Evidence from Europe and Implications for Policy

40 Pages Posted: 28 Dec 2021 Last revised: 15 Mar 2022

See all articles by Gabor Koltay

Gabor Koltay

European Union - Directorate General for Competition

Szabolcs Lorincz

European Commission, DG Competition, Chief Economist's Team

Tommaso M. Valletti

Imperial College Business School; Centre for Economic Policy Research (CEPR)

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Date Written: December 23, 2021

Abstract

The paper provides new evidence on proxy indicators of market power for major European countries. The data shows moderately increasing average industry concentration over the last two decades, a considerably increasing proportion of high concentration industries, and an overall tendency towards oligopolistic structure. Estimates of aggregate profitability also show a sustained increase over the recent decades coupled with decreasing or stagnating investment rates. While the academic and policy debate is not settled as to whether the causes of these trends are policy driven or reflect technological improvement, our findings suggest that competition policy is likely to face more challenges as large companies are becoming more common in more and more industries.

Keywords: mergers, antitrust, European Union, concentration, industries

JEL Classification: L1, L4, G34

Suggested Citation

Koltay, Gabor and Lorincz, Szabolcs and Valletti, Tommaso M., Concentration and Competition: Evidence from Europe and Implications for Policy (December 23, 2021). Available at SSRN: https://ssrn.com/abstract=3992591 or http://dx.doi.org/10.2139/ssrn.3992591

Gabor Koltay

European Union - Directorate General for Competition ( email )

Place Madou, Madouplein 1
Saint-Josse-ten-Noode/Sint-Joost-ten-Noode
Brussels, B-1049
Belgium

Szabolcs Lorincz

European Commission, DG Competition, Chief Economist's Team ( email )

MADO
Brussels, 1040
Belgium
+32.2.22.99.32.07 (Phone)

Tommaso M. Valletti (Contact Author)

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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