In this paper we argue that changes in the EU membership status of the countries in Central and Eastern Europe led to less
concentrated markets. This is due to the implementation of competition policy and other pro-competitive policies embedded
in the Community Acquis, the body of European Union law. A regression analysis using data on 39,646 firms from six survey
waves between 2002 and 2013 found EU membership to significantly increase the degree of domestic competition. While the effect
of competition policy itself on market structures was statistically insignificant, the interaction between EU membership status
and competition policy showed a strong and statistically significant competition enhancing effect. These findings were linked
to a firm-level TFP analysis. Less concentrated markets were associated with higher productivity levels. This finding is robust
after controlling for endogeneity issues. EU membership was only weakly associated with changes in TFP levels, but led to
a decrease in the variance of the productivity measure across firms.
Forschungsbereich:Industrieökonomie, Innovation und internationaler Wettbewerb
This paper argues that the accession to the European Union improves the quality of competition policy via the implementation
of pro-competitive policies, especially antitrust and competition policies, embedded in the Community Acquis. We assess this
conjecture empirically for the (former) transition economies of Central and Eastern Europe, using member countries as well
as developing and developed countries in Europe and Central Asia as a control group. The data used is a macro-economic panel
of 48 countries covering six 3-year periods between 1995 and 2012. We find that EU accession positively affected the quality
of competition policies over and above an overall trend towards more market oriented policies. The improvement in competition
policy was not reversed in a single country of the sample. The findings are robust when controlling for endogeneity issues.
We also document a slow-down in policy reform efforts in the aftermath of the crisis, challenging previous literature which
expects a reform enhancing effect of crisis.
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