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The fall and rise of market power in Europe

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  • Weche Gelübcke, John P.
  • Wambach, Achim

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.

Suggested Citation

  • Weche Gelübcke, John P. & Wambach, Achim, 2018. "The fall and rise of market power in Europe," ZEW Discussion Papers 18-003, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:18003
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    References listed on IDEAS

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    More about this item

    Keywords

    Market Power; Markups; Europe; Crisis;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • D2 - Microeconomics - - Production and Organizations
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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