IDEAS home Printed from https://ideas.repec.org/p/ecb/ecbops/200644.html
   My bibliography  Save this paper

Competition, productivity and prices in the euro area services sector

Author

Listed:
  • Roma, Moreno
  • Janger, Jürgen
  • Gerritsen, Mathijs
  • Schivardi, Fabiano
  • O'Brien, Derry
  • Chauvin, Valérie
  • Lopez-Garcia, Paloma
  • Yusupová, Elena
  • Amador, João
  • Walch, Erik
  • van Riet, Ad
  • Nicolitsas, Daphne
  • Döpke, Jörg
  • Haine, Wim
  • Cornille, David
  • Kuismanen, Mika
  • Pyyhtiä, Ilmo

Abstract

This paper analyses the degree of competition in the euro area services sector and its effects on labour productivity and relative prices in that sector over the period 1980-2003. The importance of the euro area services sector has significantly increased over time; it now accounts for around 70% of the euro area's total nominal value added and employment. Labour productivity growth across the euro area services industries appears to be characterised by a high degree of diversity and the level of services inflation is on average higher than aggregate inflation. Investigating several proxies of market competition for the non-financial business services, the paper finds that limited competition in services tends to hamper labour productivity growth in the services sector. Moreover, results tend to suggest that measures aimed at increasing services market competition may have a dampening impact on relative price changes in some services sectors and thus temporarily on aggregate inflation. JEL Classification: E

Suggested Citation

  • Roma, Moreno & Janger, Jürgen & Gerritsen, Mathijs & Schivardi, Fabiano & O'Brien, Derry & Chauvin, Valérie & Lopez-Garcia, Paloma & Yusupová, Elena & Amador, João & Walch, Erik & van Riet, Ad & Nicol, 2006. "Competition, productivity and prices in the euro area services sector," Occasional Paper Series 44, European Central Bank.
    • Handle: RePEc:ecb:ecbops:200644
    Note: 337417
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecbocp44.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mehl, Arnaud & Geis, André & Wredenborg, Stefan, 2004. "The international role of the euro: evidence from bonds issued by non-euro area residents," Occasional Paper Series 18, European Central Bank.
    2. Wolswijk, Guido & de Haan, Jakob, 2005. "Government debt management in the euro area - recent theoretical developments and changes in practices," Occasional Paper Series 25, European Central Bank.
    3. Anderton, Robert & di Mauro, Filippo & Moneta, Fabio, 2004. "Understanding the impact of the external dimension on the euro area: trade, capital flows and other international macroeconomic linkages," Occasional Paper Series 12, European Central Bank.
    4. Henrik Enderlein & Johannes Lindner & Oscar Calvo-Gonzales & Raymond Ritter, 2006. "The EU Budget: How much Scope for Institutional Reform?," Contributions to Economic Analysis, in: Designing the New European Union, pages 129-159, Emerald Group Publishing Limited.
    5. Javier Santillán & Marc Bayle & Christian Thygesen, 2000. "The impact of the euro on money and bond markets," Occasional Paper Series 1, European Central Bank.
    6. Russo, Daniela & Hart, Terry L. & Malaguti, Maria Chiara & Papathanassiou, Chryssa, 2004. "Governance of securities clearing and settlement systems," Occasional Paper Series 21, European Central Bank.
    7. Santillán, Javier & Bayle, Marc & Thygesen, Christian, 2000. "The impact of the euro on money and bond markets," Occasional Paper Series 1, European Central Bank.
    8. Gonzalez, F. & Haas, F. & Johannes, R. & Persson, M. & Toledo, L. & Violi, R. & Zins, C. & Wieland, M., 2004. "Market dynamics associated with credit ratings: a literature review," Financial Stability Review, Banque de France, issue 4, pages 53-76, June.
    9. Reiner Martin & Moreno Roma & Isabel Vansteenkiste, 2005. "Regulatory reforms in selected EU network industries," Occasional Paper Series 28, European Central Bank.
    10. Thimann, Christian & Mazzaferro, Francesco & Mehl, Arnaud & Sturm, Michael & Winkler, Adalbert, 2002. "Economic relations with regions neighbouring the euro area in the "euro time zone"," Occasional Paper Series 7, European Central Bank.
    11. Tomas Garbaravicius & Frank Dierick, 2005. "Hedge funds and their implications for financial stability," Occasional Paper Series 34, European Central Bank.
    12. Inês Cabral & Frank Dierick & Jukka Vesala, 2002. "Banking integration in the euro area," Occasional Paper Series 06, European Central Bank.
    13. Genre, Véronique & Gómez-Salvador, Ramón, 2002. "Labour force developments in the euro area since the 1980s," Occasional Paper Series 4, European Central Bank.
    14. Calza, Alessandro & de Bondt, Gabe & Van Rixtel, Adrian & Scopel, Silvia & Marqués-Ibáñez, David & Be Duc, Louis, 2005. "Financing conditions in the euro area," Occasional Paper Series 37, European Central Bank.
    15. Frank Dierick & Fatima Pires & Martin Scheicher & Kai Gereon Spitzer, 2005. "The New Basel Capital Framework and its implementation in the European Union," Occasional Paper Series 42, European Central Bank.
    16. Baele, Lieven & Ferrando, Annalisa & Hördahl, Peter & Krylova, Elizaveta & Monnet, Cyril, 2004. "Measuring financial integration in the euro area," Occasional Paper Series 14, European Central Bank.
    17. Willman, Alpo & Whelan, Karl & Altissimo, Filippo & Georgiou, Evaggelia & Sastre, Teresa & Valderrama, Maria Teresa & Sterne, Gabriel & Stocker, Marc & Weth, Mark, 2005. "Wealth and asset price effects on economic activity," Occasional Paper Series 29, European Central Bank.
    18. Annenkov, Anatoli & Madaschi, Christophe, 2005. "Labour productivity in the Nordic EU countries: a comparative overview and explanatory factors 1980-2004," Occasional Paper Series 39, European Central Bank.
    19. Véronique Genre & Daphne Momferatou & Gilles Mourre, 2005. "Wage diversity in the euro area - an overview of labour cost differentials across industries," Occasional Paper Series 24, European Central Bank.
    20. Veronique Genre & Ramon Gomez Salvador, 2002. "Labour force developments in the euro area since the 1980s," Occasional Paper Series 04, European Central Bank.
    21. Genre, Véronique & Momferatou, Daphne & Mourre, Gilles, 2005. "Wage diversity in the euro area - an overview of labour cost differentials across industries," Occasional Paper Series 24, European Central Bank.
    22. Thimann, Christian & Buldorini, Luca & Makrydakis, Stelios, 2002. "The effective exchange rates of the euro," Occasional Paper Series 2, European Central Bank.
    23. Schönenberger, Andreas & Schmiedel, Heiko, 2005. "Integration of securities market infrastructure in the euro area," Occasional Paper Series 33, European Central Bank.
    24. Robert Anderton & Filippo di Mauro & Fabio Moneta, 2004. "Understanding the impact of the external dimension on the euro area - trade, capital flows and other international macroeconomic linkages," Occasional Paper Series 12, European Central Bank.
    25. Anatoli Annenkov & Christophe Madaschi, 2005. "Labour productivity in the Nordic EU countries - a comparative overview and explanatory factors – 1998-2004," Occasional Paper Series 39, European Central Bank.
    26. Heiko Schmiedel & Andreas Schönenberger, 2005. "Integration of securities market infrastructures in the euro area," Occasional Paper Series 33, European Central Bank.
    27. Daniela Russo & Terry L. Hart & Chryssa Papathanassiou, 2004. "Governance of securities clearing and settlement systems," Occasional Paper Series 21, European Central Bank.
    28. Petschnigg, Reinhard, 2005. "The institutional framework for financial market policy in the USA seen from an EU perspective," Occasional Paper Series 35, European Central Bank.
    29. Francesco Mazzaferro & Arnaud Mehl & Michael Sturm & Christian Thimann & Adalbert Winkler, 2002. "Economic relations with regions neighbouring the euro area in the ‘euro time zone," Occasional Paper Series 07, European Central Bank.
    30. Michael Sturm & Nikolaus Siegfried, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank.
    31. Ignazio Angeloni & Michael Flad & Francesco Paolo Mongelli, 2005. "Economic and monetary integration of the new Member States - helping to chart the route," Occasional Paper Series 36, European Central Bank.
    32. Dierick, Frank, 2004. "The supervision of mixed financial services groups in Europe," Occasional Paper Series 20, European Central Bank.
    33. Luca Buldorini & Stelios Makrydakis & Christian Thimann, 2002. "The effective exchange rates of the euro," Occasional Paper Series 02, European Central Bank.
    34. Leiner-Killinger, Nadine & Madaschi, Christophe & Ward-Warmedinger, Melanie, 2005. "Trends and patterns in working time across euro area countries 1970-2004: causes and consequences," Occasional Paper Series 41, European Central Bank.
    35. Briotti, Maria Gabriella, 2005. "Economic reactions to public finance consolidation: a survey of the literature," Occasional Paper Series 38, European Central Bank.
    36. André Geis & Arnaud Mehl & Stefan Wredenborg, 2004. "The international role of the euro - evidence from bonds issued by non-euro area residents," Occasional Paper Series 18, European Central Bank.
    37. Vesala, Jukka & Cabral, Inês & Dierick, Frank, 2002. "Banking integration in the euro area," Occasional Paper Series 6, European Central Bank.
    38. Louis Bê Duc & Gabe de Bondt & Alessandro Calza & David Marqués Ibáñez & Adrian van Rixtel & Silvia Scopel, 2005. "Financing conditions in the euro area," Occasional Paper Series 37, European Central Bank.
    39. Henrik Enderlein & Johannes Lindner & Oscar Calvo-Gonzalez & Raymond Ritter, 2005. "The EU budget – how much scope for institutional reform?," Public Economics 0509005, EconWPA.
    40. Gonzalez, F. & Haas, F. & Johannes, R. & Persson, M. & Toledo, L. & Violi, R. & Zins, C. & Wieland, M., 2004. "Market dynamics associated with credit ratings: a literature review," Financial Stability Review, Banque de France, issue 4, pages 53-76, June.
    41. Winkler, Adalbert & Mazzaferro, Francesco & Nerlich, Carolin & Thimann, Christian, 2004. "Official dollarisation/euroisation: motives, features and policy implications of current cases," Occasional Paper Series 11, European Central Bank.
    42. Claus Brand & Dieter Gerdesmeier & Barbara Roffia, 2002. "Estimating the trend of M3 income velocity underlying the reference value for monetary growth," Occasional Paper Series 03, European Central Bank.
    43. Frank Dierick, 2004. "The supervision of mixed financial services groups in Europe," Occasional Paper Series 20, European Central Bank.
    44. Sturm, Michael & Siegfried, Nikolaus, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank.
    45. Alberto Musso & Thomas Westermann, 2005. "Assessing potential output growth in the euro area - a growth accounting perspective," Occasional Paper Series 22, European Central Bank.
    46. Daniela Russo & Terry L. Hart & Andreas Schönenberger, 2002. "The evolution of clearing and central counterparty services for exchange-traded derivatives in the United States and Europe - a comparison," Occasional Paper Series 05, European Central Bank.
    47. Reinhard Petschnigg, 2005. "The institutional framework for financial market policy in the USA seen from an EU perspective," Occasional Paper Series 35, European Central Bank.
    48. Lieven Baele & Annalisa Ferrando & Peter Hördahl & Elizaveta Krylova & Cyril Monnet, 2004. "Measuring financial integration in the euro area," Occasional Paper Series 14, European Central Bank.
    49. Mongelli, Francesco Paolo & Dorrucci, Ettore & Agur, Itai, 2005. "What does European institutional integration tell us about trade integration?," Occasional Paper Series 40, European Central Bank.
    50. Maria Gabriella Briotti, 2005. "Economic reactions to public finance consolidation - a survey of the literature," Occasional Paper Series 38, European Central Bank.
    51. Martin, Reiner & Roma, Moreno & Vansteenkiste, Isabel, 2005. "Regulatory reforms in selected EU network industries," Occasional Paper Series 28, European Central Bank.
    52. Henning Ahnert & Geoff Kenny, 2004. "Quality adjustment of European price statistics and the role for hedonics," Occasional Paper Series 15, European Central Bank.
    53. Russo, Daniela & Hart, Terry L. & Schönenberger, Andreas, 2002. "The evolution of clearing and central counterparty services for exchange-traded derivatives in the United States and Europe: a comparison," Occasional Paper Series 5, European Central Bank.
    54. Lieven Baele, 2004. "Measuring European Financial Integration," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(4), pages 509-530, Winter.
    55. Jesper Berg & Annalisa Ferrando & Gabe de Bondt & Silvia Scopel, 2005. "The bank lending survey for the euro area," Occasional Paper Series 23, European Central Bank.
    56. Dierick, Frank & Pires, Fatima & Scheicher, Martin & Spitzer, Kai Gereon, 2005. "The New Basel Capital Framework and its implementation in the European Union," Occasional Paper Series 42, European Central Bank.
    57. Brand, Claus & Gerdesmeier, Dieter & Roffia, Barbara, 2002. "Estimating the trend of M3 income velocity underlying the reference value for monetary growth," Occasional Paper Series 3, European Central Bank.
    58. Musso, Alberto & Westermann, Thomas, 2005. "Assessing potential output growth in the euro area - a growth accounting perspective, January 2005," Occasional Paper Series 22, European Central Bank.
    59. de Bondt, Gabe & Ferrando, Annalisa & Berg, Jesper & Van Rixtel, Adrian & Scopel, Silvia, 2005. "The bank lending survey for the euro area," Occasional Paper Series 23, European Central Bank.
    60. Kenny, Geoff & Ahnert, Henning, 2004. "Quality adjustment of European price statistics and the role for hedonics," Occasional Paper Series 15, European Central Bank.
    61. Adalbert Winkler & Francesco Mazzaferro & Carolin Nerlich & Christian Thimann, 2004. "Official dollarisation/euroisation - motives, features and policy implications of current cases," Occasional Paper Series 11, European Central Bank.
    62. Angela Maddaloni & Darren Pain, 2004. "Corporate ‘excesses’ and financial market dynamics," Occasional Paper Series 17, European Central Bank.
    63. Angeloni, Ignazio & Flad, Michael & Mongelli, Francesco Paolo, 2005. "Economic and monetary integration of New Member States - helping to chart the route," Occasional Paper Series 36, European Central Bank.
    64. Garbaravicius, Tomas & Dierick, Frank, 2005. "Hedge funds and their implications for financial stability," Occasional Paper Series 34, European Central Bank.
    65. Francesco Paolo Mongelli & Ettore Dorrucci & Itai Agur, 2005. "What does European institutional integration tell us about trade integration?," Occasional Paper Series 40, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anderton, Robert & Di Lupidio, Benedetta & Jarmulska, Barbara, 2020. "The impact of product market regulation on productivity through firm churning: Evidence from European countries," Economic Modelling, Elsevier, vol. 91(C), pages 487-501.
    2. Sophie Piton, 2017. "A European Disease? Non-tradable Inflation and Real Interest Rate Divergence," CESifo Economic Studies, CESifo Group, vol. 63(2), pages 210-234.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. González, Fernando & Coppens, François & Winkler, Gerhard, 2007. "The performance of credit rating systems in the assessment of collateral used in Eurosystem monetary policy operations," Occasional Paper Series 65, European Central Bank.
    2. Schuknecht, Ludger & Morris, Richard & Ongena, Hedwig, 2006. "The reform and implementation of the Stability and Growth Pact," Occasional Paper Series 47, European Central Bank.
    3. Van Rixtel, Adrian & Garcí­a, Juan Angel, 2007. "Inflation-linked bonds from a Central Bank perspective," Occasional Paper Series 62, European Central Bank.
    4. Kenny, Geoff & Genre, Véronique & Bowles, Carlos & Friz, Roberta & Meyler, Aidan & Rautanen, Tuomas, 2007. "The ECB survey of professional forecasters (SPF) - A review after eight years' experience," Occasional Paper Series 59, European Central Bank.
    5. Winkler, Adalbert & Geisler, Klaus-Dieter & del Río, Pedro & Pouvelle, Cyril & Golden, Brian & Vasjukova, Marina & Szalai, Zoltán & Dijkman, Miquel & Gǎlǎţescu, Anca Adriana & Noč, Matjaž & de-Alessi,, 2006. "Macroeconomic and financial stability challenges for acceding and candidate countries," Occasional Paper Series 48, European Central Bank.
    6. Ehrmann, Michael & Smets, Frank & Altissimo, Filippo, 2006. "Inflation persistence and price-setting behaviour in the euro area: a summary of the IPN evidence," Occasional Paper Series 46, European Central Bank.
    7. Winkler, Adalbert & Geis, André & Böwer, Uwe, 2007. "Commodity price fluctuations and their impact on monetary and fiscal policies in Western and Central Africa," Occasional Paper Series 60, European Central Bank.
    8. Turunen, Jarkko & Musso, Alberto & Stocker, Marc & Gómez-Salvador, Ramón, 2006. "Labour productivity developments in the euro area," Occasional Paper Series 53, European Central Bank.
    9. Arratibel, Olga & Heinz, Frigyes Ferdinand & Martin, Reiner & Przybyla, Marcin & Rawdanowicz, Lukasz & Serafini, Roberta & Zumer, Tina, 2007. "Determinants of growth in the central and eastern European EU member states - a production function approach," Occasional Paper Series 61, European Central Bank.
    10. Hartmann, Philipp & Papaioannou, Elias & Lo Duca, Marco & Heider, Florian, 2007. "The role of financial markets and innovation in productivity and growth in Europe," Occasional Paper Series 72, European Central Bank.
    11. Picón Aguilar, Carmen & Damia, Violetta, 2006. "Quantitative quality indicators for statistics: an application to euro area balance of payment," Occasional Paper Series 54, European Central Bank.
    12. Schmiedel, Heiko, 2007. "The economic impact of the Single Euro Payments Area," Occasional Paper Series 71, European Central Bank.
    13. Thimann, Christian & Skala, Martin & Wölfinger, Regine, 2007. "The search for Columbus' egg: finding a new formula to determine quotas at the IMF," Occasional Paper Series 70, European Central Bank.
    14. Russo, Daniela & Rosati, Simonetta & Chan, Diana & Fontan, Florence, 2007. "The securities custody industry," Occasional Paper Series 68, European Central Bank.
    15. Sturm, Michael & Gurtner, François, 2007. "Fiscal policy in Mediterranean countries: developments, structures and implications for monetary policy," Occasional Paper Series 69, European Central Bank.
    16. Bindseil, Ulrich & Sotamaa, Kai & Amado, Ricardo & Honings, Noëlle & Chiappa, Gigliola & Boux, Bérénice & Föttinger, Wolfgang & Ledoyen, Pierre & Schwartzlose, Henrik & van der Hoorn, Han & Monar, Fer, 2007. "The use of portfolio credit risk models in central banks," Occasional Paper Series 64, European Central Bank.
    17. Russo, Daniela & Caviglia, Giacomo & Papathanassiou, Chryssa & Rosati, Simonetta, 2007. "Prudential and oversight requirements for securities settlement," Occasional Paper Series 76, European Central Bank.
    18. di Mauro, Filippo & Baumann, Ursel, 2007. "Globalisation and euro area trade - interactions and challenges," Occasional Paper Series 55, European Central Bank.
    19. Sánchez Muñoz, Carlos & Israël, Jean-Marc, 2007. "Towards harmonised balance of payments and international investment position statistics - the experience of the European compilers," Occasional Paper Series 67, European Central Bank.
    20. Benalal, Nicholai & Diaz del Hoyo, Juan Luis & Pierluigi, Beatrice & Vidalis, Nick, 2006. "Output growth differentials across the euro area countries: some stylised facts," Occasional Paper Series 45, European Central Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecb:ecbops:200644. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.