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An analysis of the possible causes of product market malfunctioning in the EU: First results for manufacturing and service sectors

Author

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  • Fabienne Ilzkovitz
  • Adriaan Dierx
  • Nuno Sousa

Abstract

Within the context of the follow-up to the Single Market Review, the European Commission has screened EU manufacturing and service sectors for problems of market malfunctioning. This paper investigates the nature of these problems in the selected sectors and focuses on the following four dimensions of market functioning: regulation, integration, competition and innovation. In spite of the data limitations, regulation appears to be a cross cutting factor affecting market functioning in many sectors. The service sectors, in particular, show signs of an unexploited potential in terms of market integration and competition pressures. In all selected sectors there are indications of an unsatisfactory innovation performance. Overall, the analysis appears to confirm the results of the initial sector screening.

Suggested Citation

  • Fabienne Ilzkovitz & Adriaan Dierx & Nuno Sousa, 2008. "An analysis of the possible causes of product market malfunctioning in the EU: First results for manufacturing and service sectors," European Economy - Economic Papers 2008 - 2015 336, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0336
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    References listed on IDEAS

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    1. Stefano Scarpetta & Philip Hemmings & Thierry Tressel & Jaejoon Woo, 2002. "The Role of Policy and Institutions for Productivity and Firm Dynamics: Evidence from Micro and Industry Data," OECD Economics Department Working Papers 329, OECD Publishing.
    2. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
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    1. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h2q8j620g is not listed on IDEAS
    2. Judith Clifton & Daniel Díaz-Fuentes, 2010. "Is the European Union Ready for Foreign Direct Investment from Emerging Markets?," Palgrave Macmillan Books, in: Karl P. Sauvant & Geraldine McAllister & Wolfgang A. Maschek (ed.), Foreign Direct Investments from Emerging Markets, chapter 0, pages 335-358, Palgrave Macmillan.
    3. Judith Clifton & Daniel Díaz-Fuentes & Marcos Fernández-Gutiérrez & Julio Revuelta, 2011. "The new regulation of public infrastructure services in the European Union. Challenges for territorial cohesion," ERSA conference papers ersa11p1416, European Regional Science Association.
    4. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h2q8j620g is not listed on IDEAS
    5. Clifton, Judith & Díaz-Fuentes, Daniel & Fernández Gutiérrez, Marcos & Revuelta, Julio, 2011. "Bringing Citizens Back In: Renewing Public Service Regulation," MPRA Paper 33051, University Library of Munich, Germany.
    6. Henk Kox & George van Leeuwen, 2012. "Dynamic market selection in EU business services," CPB Discussion Paper 210, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Jens Matthias Arnold & Andreas Worgotter, 2011. "Structural reforms and the benefits of the enlarged EU internal market: still much to be gained," Applied Economics Letters, Taylor & Francis Journals, vol. 18(13), pages 1231-1235.
    8. Judith Clifton & Daniel Díaz-Fuentes, 2011. "The European Union, Southern Multinationals and the Question of the ‘Strategic Industries’," Palgrave Macmillan Books, in: Louis Brennan (ed.), The Emergence of Southern Multinationals, chapter 12, pages 226-241, Palgrave Macmillan.
    9. Marcos Fernández‐Gutiérrez & Oliver James & Sebastian Jilke, 2017. "Competition and switching in public service markets: Can they reduce inequalities?," Regulation & Governance, John Wiley & Sons, vol. 11(1), pages 41-63, March.
    10. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h2q8j620g is not listed on IDEAS
    11. Patrick Messerlin, 2010. "The European Community commercial policy," Working Papers hal-00972936, HAL.
    12. Kox, Henk L.M. & van Leeuwen, George, 2013. "Market selection and scale inefficiency – A new methodology applied to EU business services," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 77-94.
    13. Kox, Henk L.M. & Leeuwen, George van, 2011. "Measuring dynamic market selection by persistent scale inefficiencies - new methodology applied to EU business services," MPRA Paper 34986, University Library of Munich, Germany.
    14. Patrick Messerlin, 2010. "The European Community commercial policy," SciencePo Working papers Main hal-00972936, HAL.
    15. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h2q8j620g is not listed on IDEAS
    16. Carlo Altomonte & Marcella Nicolini & Armando Rungi & Laura Ogliari, 2010. "Assessing the Competitive Behaviour of Firms in the Single Market: A Micro-based Approach," European Economy - Economic Papers 2008 - 2015 409, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

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    More about this item

    Keywords

    European economy; economic integration; regulation; competition; innovation; Internal Market; Single Market; structural policy; manufacturing sectors; service sectors; Ilzkovitz; Dierx; Sousa;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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