This gives way to extremely high reported profits or losses. Aujourdhui, Cairn diffuse plus de 400 000 articles de revues et en ajoute 2 500 nouveaux tous les mois.
It has been developed by Sakakibara & Porter (2001) and builds on the logic that competition makes certain market players gain market share at the cost of others.
There was no clear indication of the contribution of individual industries to the patterns found. It represents lower scaled production units that display less intense rivalry.The presentation of Table 2 was based on the averages of the available time series, running from about 1998 to about 2006.
Collusion and other partnerships, for example, have no impact upon concentration but still affect competition (CPB, 2006). This could either imply the existence of vast changes in market shares for certain years, or reflect discontinuities in the data. find that investing in intangible assets fosters participation in GVCs and contributes to value appropriation along the chain.23.
Small countries typically have higher HHIs than large ones and are better represented in the applied data source. The price-cost margin follows the logic of allocative efficiency.
The measurement of competition is focused on certain observable aspects of the interaction between market players.
There was no intention to answer the question which measure(s) is(are) outstanding to represent the intensity competition at large, although it indicated that for certain measures there may be some ambiguity.
time series) 25% 10% 64% 24% 25% - sample (NACE Rev.1) 15-35 15-37*** 15-37 15-35 15-35 Market services - weight (avg.
The measure of turbulence (Forlani, 2010) is closely related to market stability. Distribution lectronique Cairn.info pour De Boeck Suprieur De Boeck Suprieur.
However, when new intangible assets are included in the picture, the intangible investment gap between the European economies and the US broadens.
This could also shed light on their robustness (ECB, 2006).
We have also argued that while it can be easier than in the past to take part in global production processes, intangible assets determine which firms and countries benefit more from this participation. This held when both the whole sample and the neighbouring countries were used as a benchmark.
When the sample were narrowed to the mid-sized countries, Belgium would still have a higher average HHI.
Although Belgium does not perform better than the average of the other countries on these two indicators, it does not do worse either. Only under constant returns to scale, the application of average cost leads to a correct calculation of the markup. Imperfect competition would give rise to the persistence of economic rent. Price-cost margin Average of entryand exit rates Herfindahl- Hirschman Index (0-1000) Average absolute change of market shares (%-pt) 2 Sensitivity of profit to cost changes 3 Food, beverages & tobacco +0.04 E -2.4% W -125 B -0.4% W -0.40 W Textile & leather +0.10 W -4.6% W +16 E -0.2% E +0.31 B Wood & cork +0.04 E -2.7% W +511 W +0.8% B +0.02 E Paper & printing +0.03 E -2.3% W +13 E +0.1% E +0.03 E Cokes & petrochemical } W: : +81 W } 0.0% E } -0.10 E Chemicals +0.19 -2.1% W +79 W Rubber & plastic: : -49 B Other minerals +0.06 W -2.9% W -11 E -0.7% W +0.65 B Basic & processed metals +0.02 E -2.2% W +492 W +0.7% B -0.54 W Machinery +0.12 W -2.3% W +122 W +0.5% B +0.65 B Elec.
In Table A3, note the differences in industry classification between the measures.
Le rsultat montre que la Belgique performe moins bien (selon trois mthodes) ou, au mieux, aussi bien (selon deux mthodes) que la moyenne des pays membres de lUnion europenne, mais certainement jamais mieux. This is prompted by a relatively high growth of wages that is not sufficiently compensated by productivity growth.
Finally, countries may have different accounting standards.
Marcolin et al.
The dynamics of concentration may be interpreted just as entry & exit: it indicates challenge and defeat but neglects rivalry among incumbent producers. 17Before analysing competition one should define the relevant market(s).
Overall, there is evidence that a great part of the value added of a final product is created in the first and last stages of the production process (R&D, design, marketing and sales), while firms involved in intermediate stages (such as the production of components and assembly) reap only a small part of the final value of the good or service produced.5. Concerning the small grocery stores, there is an analogy with other service activities operating locally, such as insurance agencies or hairdressers.
The measure is available from a database linked to EUKLEMS, where it has been calculated from AMADEUS.
An advantage is that it includes an estimation of entrepreneurial income into labour compensation.
They do so either by making an optimal use of given technology or by investing in new technology.
Since competition affects both price and cost, the markup could be a misleading measure (see e.g. (2006ab) and Boone et al.
The authors follow the belief that there is a one-to-one relationship between regulation and prices, and other measures hold a certain level of endogeneity.
Both price-cost margins and profit elasticity have been increasing. For less extreme cases, however, it is hard to determine which companies data are sensible from an economic perspective and which are not.
22From the perspective of the relevant market, entry & exit should reflect all producers entering and leaving that market. They are followed by an indication whether Belgium performs better (B), more or less equal (E) or worse (W) than the other Member States. ULC deterioration is observed and quasi equal in manufacturing (8.2%) and in market services (8.1%). In a concentrated market there can be strong rivalry among the few producers, whereas a low level of concentration may indicate a lack of competition (ECB, 2006; Molnr, 2010). Recall, however, that this might also be induced by the increasing sample used for calculating the measure, which rose from 87,000 company accounts in 1997 to 113,000 in 2006. A leading study for the EU has been made by Cincera & Galgau (2005).
Note that the ADSEI/DBRIS data show an average entry and exit rate (non-market services included) falling from 8.9 to 7.2% between 1998 and 2002, and then rising to 8.7% in 2007.
Few countries have mechanisms for preventing competitiveness deterioration.
relate one specific intangible asset (organisational capital) and backward GVC participation, i.e. The impact of competition on prices is indeed driven by allocative efficiency. For many industries there are discrepancies between the total turnover of the sample and the official production value of the industry as given in the EUKLEMS database. The last two measures, market stability and profit elasticity, seem to have no serious pitfalls, at least from a theoretical point of view. He analysed the same measures, in some cases from more detailed data sources, and managed to relate the weak performance to the strong market regulaton of that industry in Belgium.
Considering the evolution of unit labour costs (ULC), measured as the hourly wage divided by hourly productivity, as an indicator of competitiveness development, Table 1 shows its cumulative evolution since the adoption of the law relative to employment promotion and preventive safeguarding of competitiveness. Although the same problems of continuity should hold, the course of the time series is relatively smooth.
According to the common interpretation of the price-cost margin, this would imply a decreasing intensity of competition, in particular in services industries. The positive relationship between backward participation and productivity growth is confirmed in our sample economies (Figure 5).
No time series could thus be analysed.
Moreover, numerous studies have demonstrated that intangible capital is a main driver of economic growth and international competitiveness.
In a recent study Biatour et al.
In this paper, after briefly reviewing these two fields of analysis, we suggest some lines along which they can be fruitfully linked in order to establish the basic framework with which to investigate the synergies between intangible capital and participation in global value chains (GVCs) as drivers of productivity growth in modern economies.
Cet article explore la mesure des conditions de concurrence en analysant cinq mthodes utilises dans la littrature conomique. The incompleteness of the data and identification of foreign firms is less of a problem.
Again there was some ambiguity in the outcomes. (2007) pretend that this measure gives more plausible results than the price-cost margin or market concentration does. Besides the selection effect, market concentration thus involves a reallocation effect. They found that intangible capital accounted for two-thirds of US productivity growth in the business sector between the mid-1990s and the early 2000s. Vous avez t dconnect car votre compte est utilis partir d'un autre appareil.
32Recent evidence shows that the competitiveness of Belgium is hampered by relatively high unit labour cost, at least in comparison to its neighbouring countries.
This could give rise to decreases in the HHI that are not due to falling market concentration.
Is Europes Productivity Glass Half Full or Half Empty.
1 ) See Annex Table A1 for the definition of the time series and the samples of industries.
France and Spain are not in the sample of the price-cost margin. Intereconomics represents over 50 years of economic policy oriented publishing.
You might also want to visit our Cairn International Edition. Most conveniently, entry & exit is derived from business registers. Fourth, competition leads to the growth of productive firms through the leveraging of economies of scale, while at the same time inducing the exit of the least productive firms.25.
3 ) The UK is excluded from the other European countries because of its too different outcomes. There are several channels through which participation in GVCs and productivity can be linked.
The less perfect competition is, the higher the markup would be. ***) Data for NACE 19, 23, 25 and 40-41 are included in the manufacturing and services totals, but not published separately; The market economy totals also include NACE 10-14.
High entry and exit thus indicates vigorous competition.
The samples of other countries range between 7 and 23.
For the whole market economy it would then be 8.3%, which is still below but much closer to the European average. the foreign value added content of a countrys exports, finding that industry-level investment in organisational capital is causally linked to GVCs in the form of backward linkages with the foreign market.22 Jona-Lasinio et al.
Because of this theoretical link and a good availability of data, the price-cost margin has been widely accepted as a measure of competition. (2011) analysed the impact of R&D, human capital, technology diffusion, international trade and market regulation upon Belgian TFP growth. Ces mthodes sont les marges prix-cot, les entres-sorties, la concentration du march, la stabilit du march et la sensibilit des bnfices. 3In the growth accounting framework, labour productivity growth might be decomposed into three factors: the increase in capital per hour worked, called capital deepening; the change in the characteristics (qualification, gender, age) of the labour force, called the labour composition effect (LCE); and the growth of total factor productivity (TFP) obtained as the residual component of this decomposition.
(2010), EUKLEMS and own calculations.
Germany and the Netherlands are not among the seven.
11Entry & exit as a measure comes from the phenomenon that competition may attract new challengers to the market, whereas the least efficient producers are forced to withdraw.
This paper has shown that intangible capital is as important as fixed/tangible capital in many advanced countries, and its importance is growing over time. Compared to the neighbouring countries, the patterns of convergence have been more obvious.
A relatively high level of imports indeed shows the competitive pressure coming from foreign producers.
34The outcomes point to the conclusion that the intensity of competition is at best similar to the average of other European countries.
The remaining neighbour is France which seems to do worse for both profit elasticity and market stability. It explored five measures for the intensity of competition, each focusing on a specific aspect.
Comment ne rien laisser passer ? When the rates are calculated from the ADSEI/DBRIS data, they would be between 1.5 and 3.5%-points higher in most of the industries. The Annex Table A1 gives the precise time series, which are different per measure. Our preliminary findings corroborate the assumption of a positive correlation between these three factors.
(2010).
There is a general consensus that integration into GVCs brings benefits beyond those traditionally associated with international trade in final goods, allowing countries to specialise in single tasks and benefit from economies of scale and scope.
There are further complications arising from industry data.
other European countries Divergence Convergence Constant Weak convergence Overtaken Weak divergence Market services Beginning of time series + 0.02 + 0.02 + 28 + 48 - 0.07 + 0.08 End of time series + 0.20 + 0.29 + 10 + 10 + 0.04 + 0.03 Evolution of Belgium w.r.t.
The emergence of a new technological paradigm based on information and communication technologies (ICTs) involves innovative mechanisms of knowledge creation and diffusion, changes in firms organisation within and across countries, and the development of new skills.
In services, market concentration and the profit elasticity were lower than in manufacturing.
Chaque mthode prsente des limites, la fois dun point de vue thorique et empirique mais peut tre utilise comme une approximation de lintensit et de lvolution de la concurrence sous-jacente.
We can also expect a positive relationship between GVC participation and productivity.
Price-cost margin Entry & exit Market concentration Market stability Profit elasticity Source Braila et al.
Entry from abroad is only registered in the entered industry when it concerns FDI.
In particular, the relative weakness of TFP growth, which should be fed by technological development, has contributed to this. Hence, a domestic manufacturing industry does not cover the whole relevant market of its products. The profit elasticity of the only neighbouring country in the sample, France, stayed below that of Belgium, but evolved at more or less the same pace.
Vous ntes actuellement pas connect(e) en institution.
First, there can be advantages from specialising in the most productive activities and offshoring the least productive ones.
using the newly constructed INTAN-Invest cross-country, cross-industry dataset for 18 European countries and the US, which is used to analyse the impact of tangible and intangible capital before and after the Great Recession in 2008-2009.14 They found that tangible investment fell dramatically during the Great Recession and has barely recovered, whereas intangible investment has been comparatively resilient; it recovered quite quickly in the US, though it lagged behind in the EU. The numbers in the table show the change in index points between the beginning and the end of the time series. Capital compensation has been recalculated as the real capital stock multiplied by the user cost of capital.
The only exception is wholesale & retail trade, which in almost all cases performed worse than its average European counterpart.The weak performance of most of the measures with respect to other European countries may thus be reflected by the relatively weak growth of TFP.
Boone, J., J.C. van Ours & H. van der Wiel, Braila, C., R. Dekker, A. Kleinknecht, M. Micevska, G. Rayp, S. Sanyal & J. van der Linden, CPB Netherlands Bureau for Economic Policy Analysis, Creusen, H., B. Vroomen, H. van der Wiel & F. Kuypers, Organisation for Economic Co-Operation and Development, Vermeulen, P., D. Dias, M. Dossche, E. Gautier, I. Hernando, R. Sabbatini & H. Stahl, Dernire publication diffuse sur Cairn.info ou sur un portail partenaire, Reflets et perspectives de la vie conomique. The user cost of capital is calculated as.
Like market stability the measure is taken from Braila et al.
Source: C. Corrado J. Haskel, C. Jona-Lasinio, M. Iommi: Intangible investment in the EU and US before and since the Great Recession and its contribution to productivity growth, in: Journal of Infrastructure, Policy and Development, forthcoming.
For international benchmarking a database is available at Eurostat.
(2010), EUKLEMS and own calculations.
From the viewpoint of Schumpeters creative destruction, high entry and exit would be a prerequisite for innovative and competitive markets.
Again from the viewpoint of Schumpeters creative destruction, it would be preferable that new and innovative challengers keep entering the market, decreasing concentration or keeping it constant.
To construct Figure 1, the classifications have been normalised to 19 industries. Instead of marginal cost, however, average cost is mostly applied as a proxy, since it can easily be derived from company or industry data.
33This article analysed the phenomenon of competition in the Belgian economy, without statistically relating it to TFP growth. [5] The evolutions during that period were a bit contradictory, see Table 3. For each of the three countries, four of the five measures were available.
This was already illustrated by the retail example, where the two small groceries are in the same industry but not in the same market.
The other two measures market stability and profit elasticity indicate that this could indeed be the case. This is not only induced by theoretical reasons, but maybe the more so from the applied data, which often do not fit the theoretical requirements.
(2010), Eurostat and EUKLEMS. The reader less interested in that detail may mind the occurrence of measurement problems and skip the section.
The next section gives an overview for the five measures of this article. Price-cost margin Average of entry and exit rates Herfindahl- Hirschman Index (0-1000) Average absolute change of market shares (%-pt) 2 Sensitivity of profit to cost changes 3 Belgium EU Belgium EU Belgium EU Belgium EU Belgium EU Food, beverages & tobacco 1.14 1.10 3.3% 5.8% 106 231 0.4% 0.8% 1.39 1.79 Textile & leather 1.08 0.99 4.4% 9.0% 219 204 0.5% 0.7% 2.14 1.83 Wood & cork 1.04 1.01 4.6% 7.4% 760 249 2.0% 1.2% 2.21 2.18 Paper & printing 1.11 1.08 5.4% 7.7% 93 79 0.8% 0.6% 1.27 1.23 Cokes & petrochemical }: : 433 352 } 1.3% 1.3% } 1.49 1.60 Chemicals 1.33 1.14 3.2% 5.3% 223 143 Rubber & plastic: : 71 119 Other minerals 1.10 1.04 3.3% 6.3% 263 273 0.6% 1.3% 2.38 1.73 Basic & processed metals 1.03 1.01 4.3% 6.5% 630 138 1.5% 0.7% 1.33 1.87 Machinery 1.18 1.06 3.4% 5.7% 234 112 1.2% 0.7% 2.71 2.06 Elec. 13Strongly related to the two previous measures, but more declaring about reallocation in a market with constant entry & exit or concentration, is the measure of market stability.
Likewise does exit include domestic and foreign firms, liquidations, and firms divesting their activities from the concerned market. The outcomes should therefore be treated as proxies of what the indicators should really measure.
(2010), which used AMADEUS for the calculation. For example, the market-share stability of the Belgian software industry fell the most behind the other countries average of all Belgian industries, showing relatively weak dynamics in the industry. Furthermore there are hikes and falls that are too sudden to be explained by structurally evolving market concentration.
A high elasticity (in absolute value) would thus indicate vigorous competition. 29From the perspective of TFP growth and competitiveness, it may be more important to see how the intensity of competition evolves with respect to other countries.
Therefore, more sophisticated analyses may help shed light on the possible mediating role of intangible assets in affecting the relationship between GVC participation and productivity growth. They counted seven and had an average HHI of 227, which was 40 points lower than in Belgium.
Cecilia Jona-Lasinio, 3 ) The UK is excluded from the other European countries because of its too different outcomes.
Data to examine a pattern of convergence or divergence was lacking.
There were many industries that did much better than their European counterpart for one measure, but much worse for another. While the literature mainly agrees that participating in GVCs is largely beneficial, it has also been stressed that advantages are not equally divided among GVC participants. The higher the number of producers, and the less the dominance, the more competitive the market would be.
30From the measures of market concentration (services only) and profit elasticity, one could prudently conclude that the intensity of competition has evolved more favourably in Belgium than in other Member States. 26The average price-cost margin is somewhat higher than that of other countries, the neighbouring countries included.
La croissance de la Productivit totale des facteurs (PTF) a t particulirement moins soutenue que dans les pays voisins. The impact on cost is driven by productive and dynamic efficiency. As regards the evolution of competition, the outcomes for Belgium seem somewhat more favourable. There may well be strong rivalry in a concentrated market and/or weak rivalry in a non-concentrated market. This should indicate higher market concentration. For manufacturing there has been some convergence with respect to the neighbouring countries. Indeed, empirical evidence shows that joining GVCs brings positive and significant gains in productivity.16, But what factors facilitate countries participation in GVCs?
Given the explorative nature of the analysis, one should be prudent taking policy conclusions. Germany, the Netherlands, Austria and Denmark are not in the sample of the profit elasticity.
2 ) Average of 1998-2001 and 2003-2005, since the data for 2002 seem too erratic.
In 1996 the average Belgian price-cost margin for market services was only 0.02 points higher than that of the other countries (1.06 and 1.04, respectively). As the figure clearly indicates, intangibles are essential to creating value added in upstream (R&D, design) and downstream activities (marketing, advertising).
Comparison to the neighbouring countries could give rise to the same conclusion. A disadvantage of EUKLEMS is that it assumes perfect competition by data construction: the sum of labour and capital compensation being equal to nominal value added. The heterogeneous behaviour of US and European countries in terms of intangible capital accumulation (with Europe and in particular some Mediterranean countries still lagging behind) suggests that greater efforts are required at the European level to encourage public and private investment in intangibles in order to foster economic growth and international competitiveness. Belgium ranks among the lower half, but not too deeply (score of 3.8 on a scale of 10). Considering the measures together, the outcomes could nevertheless provide an insight into the intensity of competition in Belgium with respect to other European countries, and the way it has evolved since the late nineties. Entry includes domestic and foreign firms, the latter either investing in a production unit (FDI) or selling finished products (imports).
Note: EU14 denotes the EU15 member states excluding Luxembourg. Belgium is one of these: it adopted in 1996 a law limiting hourly wage increases in private sector to the growth in its three neighbouring countries.
Among further determinants underlined by the economic literature, competition conditions are particularly interesting as improving these conditions is generally not budgetary hurting and could be linked to the administrative simplification process. Overall, their findings support the evidence that the slowdown in labour productivity growth since the Great Recession has been driven by a decline in total factor productivity growth, with relatively minor roles for tangible and intangible capital. It may be working under the threat of entry and/or when there is a strong rivalry among incumbent firms.
To the best of our knowledge, there are few empirical analyses which aim at disentangling the underlying determinants.
This implies that competition makes market players strive to be the most cost-efficient.
A lack of competition may then lead to the persistence of inefficient producers, keeping the industrys average price-cost margin relatively low.
The most comprehensive data source is that of company accounts.
The TFP contribution measures how efficiently the main factors of production labour and capital - are combined in the production process and is linked to technical progress and organisational changes. For entry & exit, as already noted, no time series was available for other Member States.
A database of company accounts can of course be filtered for such extreme cases.
X-efficiency is a very direct measure for productive efficiency. The measure is taken from a study by Braila et al. (2010) Time (series) 1996-2005* 2006 1997-2006 1998-2005**** 1997-2005 Countries 9 of EU-15 23** of EU-27 21 of EU-25 13 of EU-15 7 of EU-15 Industries 17 19 17 19 19 Manufacturing - weight (avg. Compared to the neighbouring countries this difference has become even more (0.29 points). Dhyne (2009), however, did not find competition among its explanatory factors. The average profit elasticity is 1.26.
Intereconomics For most industries Belgium ranks between 19th and 22nd out of 23 countries. ****) Austria from 1999; Denmark from 2000.
The Belgian and European HHI in manufacturing had both fallen by the same magnitude, keeping the difference around 100 index-points.
Market economy Germany France Netherlands Belgium Spread between Belgian variable and weighted average of 3 neighbours Unit Labor Cost -0,5 13,4 19,1 13,2 6,1 Hourly wage 19,8 42,6 51,9 34,8 2,7 Hourly productivity 20,4 25,8 27,5 19,0 -3,3 -Capital deepening 11,3 8,6 6,7 15,6 5,3 -Labor composition effect 0,0 4,2 4,3 3,3 1,3 -TFP 8,2 11,2 14,5 -0,3 -9,3 Manufacturing Unit Labor Cost -9,3 -4,4 3,4 1,8 8,2 Hourly wage 28,1 43,4 48,5 38,4 1,9 Hourly productivity 41,3 49,9 43,6 36,0 -5,8 -Capital deepening 6,4 11,7 9,4 17,7 8,3 -Labor composition effect 3,0 6,2 4,4 4,8 0,4 -TFP 29,0 26,4 25,8 10,4 -13,4 Market services Unit Labor Cost 4,5 16,9 14,8 19,2 8,1 Hourly wage 18,7 40,9 54,4 35,4 3,9 Hourly productivity 13,5 20,5 34,5 13,6 -3,9 -Capital deepening 16,2 9,2 8,1 17,1 3,9 -Labor composition effect -0,9 3,6 4,0 3,6 2,3 -TFP -1,4 6,5 19,6 -6,5 -9,7 Source: Own calculations based on EUKLEMS database release November 2009.
(2007), shows the reluctance of prices to move up- or downwards. *) See Annex Table A1 for the definition of the time series and the samples of countries and industries. Market concentration has fallen.
Wage premiums, where workers manage to turn part of the economic rent into labour compensation, have an impact upon the share of the rent that remains to be measured.
Differences in allocation to the NACE Rev.1 branches may be one of the causes.As for market stability it again concerns the market shares of domestic and foreign firms that should determine the diagnosed turbulence.
2The results show a cumulative deterioration, over the period 1996-2007, of Belgian market economy[1] competitiveness by 6.1% compared with the weighted average of the three neighbouring countries. Mme si larticle ntablit pas statistiquement de relation entre concurrence et PTF, les rsultats suggrent que la faible performance en termes de PTF pourrait tre due des conditions de concurrence dfavorables.Codes JEL: D24, L11. Note: EU14 denotes the EU15 member states excluding Luxembourg.
Given the complex nature of competition, however, one should be aware of the caveats and pitfalls of the measures.
Valentina Meliciani, This article is part of Solving the European Productivity Puzzle. This could be confirmed by the price-cost margin when the effects of productive and dynamic efficiency dominate those of allocative efficiency.
- Brea Reese Watercolor Creams
- Ana Abiyedh Poudree Notes
- Junkyards In Newark, Nj Avenue P
- Ring Doorbell Wireless Installation
- Kendra Scott Tennis Bracelet
- Givenchy L'interdit Intense Woman
- Black Dressy Flip Flops For Wedding
- Food Waste Disposal Card South Korea
- Oversized Flannel Dress Plus Size
- Yacht Steering Wheel Leather Cover
- Massey Ferguson 135 Lift Adjustment
- Weathered Teak Side Table
- Ralph Lauren Crest Blazer
- Bowmonk Brake Tester User Manual
- Aws_lb_listener Multiple Ports
- Beauty And The Beast Figurine Cake Topper
- Sandblaster With Vacuum Recovery
- Vacuum Repair Birmingham, Al
- Bigelow Black Tea, Caffeine