Insights on Declining Business Dynamism in Europe

Thursday, 21 March 2024, 00:04

This analysis delves into the declining business dynamism trends in Europe, shedding light on the impact of shocks, market power, and responsiveness. A comprehensive examination of 19 European countries reveals structural declines in job reallocation rates and employment shares in young firms. The decrease is attributed to lower responsiveness to productivity shocks and reduced dispersion of productivity innovations, resulting in slower job reallocation. The findings emphasize the importance of addressing market power and productivity challenges to revive business dynamism in Europe.
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Insights on Declining Business Dynamism in Europe

Insights on Declining Business Dynamism in Europe

Analyzing the trends and drivers of business dynamism in 19 European countries, this report uncovers concerning patterns.

Key Points:

  • Job Reallocation Declines: Structural declines documented across all countries.
  • Productivity Impact: Lower responsiveness to shocks and innovation dispersion identified.
  • Market Power Influence: Reduced sales growth and increased markups contribute to the decline.

The analysis underscores the need for strategies to enhance responsiveness and innovation in the European business landscape.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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