European firm concentration and aggregate productivity / Tommaso Bighelli, Filippo di Mauro, Marc Melitz, Matthias Mertens
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European firm concentration and aggregate productivity
Discovery
1756260346
URN
urn:nbn:de:gbv:3:2-136056
DOI
ISBN
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [28. April 2021]
Content
1 Online-Ressource (III, 84 Seiten, 3,16 MB) : Diagramme
Edition
Language
eng
Comment
Abstract
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.
Series
IWH-Diskussionspapiere ; 2021, no. 5 (April 2021) ppn:837399270