The Fall and Rise of Market Power in Europe

John P. Weche and Achim Wambach

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2021, vol. 241, issue 5-6, 555-575

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, J. (2011). Recovering markups from production data. Int. J. Ind. Organ. 29: 350–355, and De Loecker, J. and Warzynski, F. (2012). Markups and firm-level export status. Am. Econ. Rev. 102: 2437–2471. 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 (search for similar items in EconPapers)
JEL-codes: D2 D4 E2 L1 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Working Paper: The fall and rise of market power in Europe (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:241:y:2021:i:5-6:p:555-575:n:9

DOI: 10.1515/jbnst-2020-0047

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