Working Paper 03-10 - Competition and regulation, Belgium, 1997 to 2004

The aim of this paper is to describe product market competition in the Belgian economy for the period 1997]2004 and to illustrate some causality with market regulation. The analysis is held at the industry level, for selected manufacturing and services industries. Emphasis is given to the profit elasticity (PE) measurement of competition (the gBooneh indicator) and the average profitability (AP) indicator (an approximation of the mark]up indicator). We applied the OECD Regimpact indicator as a proxy for regulation. We present some stylized facts, for Belgium in comparison with selected EU countries; and through an econometric exercise we illustrate the potential of regulation as an explanatory variable for competition.