Competition in the Netherlands and Belgium: Service Sector Evidence

This paper examines competition in the dutch and belgian service sector for the period 1995–1999. The paper explores the link between firm profitability and market structure, and provides evidence of a non-optimal functioning of both markets. While analysis reveals the existence of a market sector effect in both countries, this effect is larger in the dutch sample than in the belgian sample, implying that the dutch service sector is less competitive than the belgian service sector. An analysis of the market friendliness of regulations in both countries does not provide a comprehensive explanation for this finding.