Columbia International Affairs Online: Policy Briefs

CIAO DATE: 10/2012

Unleashing Competition in EU Business Services

Henk L.M. Kox

September 2012

Centre for European Policy Studies

Abstract

In most EU member states, the business services industry has booked no productivity growth during the last two decades. The industry’s performance in the other member states was weaker than that of its US counterparts. Exploring what may be causing this productivity stagnation, this policy brief reports that weak competition has contributed to the continuing malaise in European business services. The study analyzed the persistence (over time) of firm-level inefficiencies. The evidence further suggests that competition between small firms and large firms in business services is weak.