Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Wednesday, July 11, 2018

The fall and rise of market power in Europe

John P. Weche (Leuphana University Lueneburg, Germany; Monopolies Commission, Bonn, Germany) and Achim Wambach (Monopolies Commission, Bonn, Germany; Centre for European Economic Research (ZEW), Mannheim, Germany) explore The fall and rise of market power in Europe.

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.

https://lawprofessors.typepad.com/antitrustprof_blog/2018/07/the-fall-and-rise-of-market-power-in-europe.html

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