cover_IWH-CompNet-DP_2021_03.jpg

European Firm Concentration and Aggregate Productivity

This article derives a European Herfindahl-Hirschman concentration index from 15 micro-aggregated country datasets. In the last decade, European concentration rose due to a reallocation of economic activity towards large and concentrated industries. Over the same period, productivity gains from reallocation accounted for 50% of European productivity growth and markups stayed constant. Using country-industry variation, we show that changes in concentration are positively associated with changes in productivity and allocative efficiency. This holds across most sectors and countries and supports the notion that rising concentration in Europe reflects a more efficient market environment rather than weak competition and rising market power.

28. April 2021

Autoren Tommaso Bighelli Filippo di Mauro Marc Melitz Matthias Mertens

Empfohlene Publikationen

cover_journal-of-the-european-economic-association.gif

European Firm Concentration and Aggregate Productivity

Tommaso Bighelli Filippo di Mauro Marc Melitz Matthias Mertens

in: Journal of the European Economic Association, Nr. 2, 2023

Abstract

This paper derives a European Herfindahl–Hirschman concentration index from 15 micro-aggregated country datasets. In the last decade, European concentration rose due to a reallocation of economic activity toward large and concentrated industries. Over the same period, productivity gains from an increasing allocative efficiency of the European market accounted for 50% of European productivity growth while markups stayed constant. Using country-industry variation, we show that changes in concentration are positively associated with changes in productivity and allocative efficiency. This holds across most sectors and countries and supports the notion that rising concentration in Europe reflects a more efficient market environment rather than weak competition and rising market power.

Publikation lesen

Ihr Kontakt

Für Wissenschaftler/innen

Dr. Matthias Mertens
Dr. Matthias Mertens
Wissenschaftlicher Mitarbeiter

Für Rückfragen stehe ich Ihnen gerne zur Verfügung.

Anfrage per E-Mail

Für Journalistinnen/en

Mitglied der Leibniz-Gemeinschaft LogoTotal-Equality-LogoGefördert durch das BMWK