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Industrial Concentration and Market Integration in the European Union
Author(s) -
Lyons Bruce,
Matraves Catherine,
Moffatt Peter
Publication year - 2001
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00230
Subject(s) - economics , novelty , european union , competition (biology) , market structure , aggregate data , aggregate (composite) , econometric model , ex ante , econometrics , member states , single market , microeconomics , industrial organization , international trade , macroeconomics , ecology , philosophy , materials science , theology , composite material , biology , medicine , pathology
Unlike previous cross‐section studies which test predictions from the theory of industrial structure, we do not make an ex ante assumption about the geographical market at which competition takes place. We develop an econometric technique that endogenously determines whether the EU or member state is the appropriate market level for each industry, while also estimating a structural model of concentration and market size. Another novelty is that we use European national as well as aggregate EU data. Strong support is found for the importance of endogenous fixed costs in the theory of market structure.