European business services have experienced about two decades of almost zero productivity growth. The paper investigates whether this is caused by weak dynamic market selection. The time pattern of scale-related inefficiencies is used as an indicator for the effectiveness of market selection.We...

The paper investigates whether the poor productivity performance of the European business services industry is related to scale effects, market structure, and regulatory impacts. We apply parametric and nonparametric methods to estimate the productivity frontier and so obtain the distance of...