The Impact of Competition Policy Enforcement on the Functioning of EU Energy Markets

Florian Szücs, Tomaso Duso, Jo Seldeslachts

Publication: Scientific journalJournal articlepeer-review

Abstract

We investigate the impact of competition policy enforcement on the functioning
of European energy markets while accounting for sectoral regulation. For this purpose, we compile a novel dataset on the European Commission’s (EC) and EU
member states’ competition policy decisions in energy markets and combine it
with firm- and sector-level data. We find that EC merger policy has a positive and
robust impact on (i) the level of competition, (ii) investment and (iii) productivity.
This impact, however, only shows up in low-regulated sectors. Other competition
policy tools—EC state aid control and anti-trust, as well as all member state policy
variables—do not have a uniform effect on energy markets. Our findings are consistent with the idea that the EC’s merger policy actions have been used to overcome
obstacles to a well-functioning EU energy sector and may have contributed
to the overall development of gas and electricity markets in Europe.
Original languageEnglish
Pages (from-to)97 - 120
JournalEnergy Journal
Volume40
Issue number5
Publication statusPublished - 2019

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