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The impact of the implementation of the Single Market Programme on productive efficiency and on mark-ups in the European Union manufacturing industry

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  • Jacques-Bernard Sauner-Leroy

Abstract

This paper analyses the evolution of mark-up levels in the European Union (EU) manufacturing industry over the period 1987-2000 and links this evolution with price and cost developments. It provides an assessment of the impact of the completion of the Single Market Programme (SMP) on the productive efficiency and the market power of manufacturing firms and on prices of manufactured products. Results suggest that in the period prior to the completion of the SMP at the end of 1992, mark-ups of EU manufacturing firms deteriorated in line with a fall in prices, but that mark-ups recovered thereafter thanks to the realisation of productive efficiency gains. For society as a whole, there are welfare gains associated with the SMP, insofar as profit margins recovered after the initial shock delivered by the implementation of the SMP, while prices in real terms declined.

Suggested Citation

  • Jacques-Bernard Sauner-Leroy, 2003. "The impact of the implementation of the Single Market Programme on productive efficiency and on mark-ups in the European Union manufacturing industry," European Economy - Economic Papers 2008 - 2015 192, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:ecopap:0192
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    References listed on IDEAS

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    Cited by:

    1. Flora Bellone & Patrick Musso & Lionel Nesta & Frédéric Warzynski, 2009. "L'effet pro-concurrentiel de l'intégration européenne. Une analyse de l'évolution des taux de marge dans les industries manufacturières françaises," Revue de l'OFCE, Presses de Sciences-Po, pages 139-163.
    2. Becker, Sascha S. & Nautz, Dieter, 2012. "Inflation, price dispersion and market integration through the lens of a monetary search model," European Economic Review, Elsevier, vol. 56(3), pages 624-634.
    3. repec:spo:wpecon:info:hdl:2441/6153 is not listed on IDEAS
    4. Valkonen, Laura, 2006. "Deregulation as a Means to Increase Competition and Productivity," Discussion Papers 1014, The Research Institute of the Finnish Economy.
    5. Gaëtan Nicodème & Jacques-Bernard Sauner-Leroy, 2007. "Product Market Reforms and Productivity: A Review of the Theoretical and Empirical Literature on the Transmission Channels," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 53-72, March.
    6. Peltonen, Tuomas & Skala, Martin & Santos Rivera, Alvaro & Pula, Gabor, 2008. "Imports and profitability in the euro area manufacturing sector: the role of emerging market economies," Working Paper Series 918, European Central Bank.
    7. Harald Badinger & Fritz Breuss, 2005. "Has Austria’s Accession to the EU Triggered an Increase in Competition? A Sectoral Markup Study," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(2), pages 145-180, June.
    8. Wolfgang Pointner, 2005. "In & Out – A Country Comparison Reflecting on the Enlargement Round of 1995," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 90-100.
    9. CORCOS, Gregory & DEL GATTO, Massimo & MION, Giordano & OTTAVIANO, Gianmarco I.P., 2007. "Productivity and firm selection: intra- vs international trade," CORE Discussion Papers 2007060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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