EU markets are more competitive than U.S. markets? Not so fast

A recent NBER working paper by Gutiérrez & Philippon attempts to link differences in U.S. and EU antitrust enforcement and product market regulation to differences in market concentration and corporate profits. The paper’s abstract begins with a bold assertion:Until the 1990’s, US markets were more competitive than European markets. Today, European markets have lower concentration, lower excess profits, and lower regulatory barriers to entry.The authors are not clear what they mean by lower, however its seems they mean lower today relative to the 1990s.This blog post focuses on the first claim: “Today, European markets have lower concentration …”At the risk of being pedantic, Gutiérrez & Philippon’s measures of market concentration for which both U.S. and EU data are reported cover the period from 1999 to 2012. Thus, “the 1990s” refers to 1999, and “today” refers to 2012, or six years ago.The…

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