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Industry concentration in Europe: Trends and methodological insights

Author

Listed:
  • Calligaris, Sara
  • Chaves, Miguel
  • Criscuolo, Chiara
  • De Lyon, Joshua
  • Greppi, Andrea
  • Pallanch, Oliviero

Abstract

Concentration - the share of an industry's output accounted for by its largest firms and a frequently used proxy of competition - has increased in European countries. This paper provides evidence about this development by introducing several methodological refinements in the cross-country measurement of concentration: it defines industries at a disaggregated level, mostly 3-digit; it takes into account the geographic level at which competition takes place - domestic, European or global; and it accounts for linkages between firms within the same domestic and multinational business group in the relevant geographic region of competition. It then applies these improvements to representative data for fifteen European countries, showing that average concentration increased by about 5 percentage points over the period 2000-2019, from 26% to more than 31%. Third, the paper investigates how each of the methodological improvements affects the levels and trends of concentration.

Suggested Citation

  • Calligaris, Sara & Chaves, Miguel & Criscuolo, Chiara & De Lyon, Joshua & Greppi, Andrea & Pallanch, Oliviero, 2024. "Industry concentration in Europe: Trends and methodological insights," LSE Research Online Documents on Economics 126768, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:126768
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    File URL: http://eprints.lse.ac.uk/126768/
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    References listed on IDEAS

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    More about this item

    Keywords

    concentration; competition; market power;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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