May It Be a Little Bit More of Market Power? On Productivity Growth and Competition

In its heart, competition represents an important driver of productivity growth that has slowed in European countries since the financial crisis. This study examines the non-linear relationship between productivity growth and market power, using data on Central European manufacturing firms, from 200...

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Bibliographic Details
Published in:Journal of industry, competition and trade competition and trade, 2023-12, Vol.23 (3-4), p.123-170
Main Author: Steinbrunner, Philipp R.
Format: Article
Language:English
Subjects:
Competition
Economic crisis
Economic growth
Economic Policy
Economics
Economics and Finance
European Integration
Expenditures
Growth rate
Industrial Organization
Innovations
International Economics
Manufacturing
Microeconomics
Power
Production functions
Productivity
R & D/Technology Policy
Robustness
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Summary:In its heart, competition represents an important driver of productivity growth that has slowed in European countries since the financial crisis. This study examines the non-linear relationship between productivity growth and market power, using data on Central European manufacturing firms, from 2009 to 2017. The results show concave relationships between both variables, and that firms in competitive industries respond more sensitively to market power. This study contributes to the literature by applying not only the standard firm-level measure of Lerner indexes, but also by calculating them from production functions and checking robustness with country-industry-level concentration measures.
ISSN:1566-1679
1573-7012
DOI:10.1007/s10842-023-00399-x