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This paper derives a European Herfindahl–Hirschman concentration index from 15 micro-aggregated country datasets. In the last decade, European concentration rose due to a reallocation of economic activity toward large and concentrated industries. Over the same period, productivity gains from an increasing allocative efficiency of the European market accounted for 50% of European productivity growth while markups stayed constant. Using country-industry variation, we show that changes in concentration are positively associated with changes in productivity and allocative efficiency. This holds across most sectors and countries and supports the notion that rising concentration in Europe reflects a more efficient market environment rather than weak competition and rising market power. [ABSTRACT FROM AUTHOR]

: Corrado Barbui and Irene Bighelli question the current rules governing registration of new medicines in Europe, using the example of psychiatric drugs, and argue that the concept of absolute efficacy should be replaced by the concept of added value whereby evidence from studies comparing a new product with an active comparator should guide the drug approval process. Please see later in the article for the Editors' Summary [ABSTRACT FROM AUTHOR]