Recent research conducted at the ECB4 reaches the same conclusion for Europe. The authors find that in Europe mark-ups have decreased if anything and market concentration has been stable over the last decade. Therefore, increasing market power cannot be the reason behind the decline in the labour share in Europe.
Loukas and his co-author also find the second explanation difficult to reconcile with the data, as investment spending on unmeasured capital would need to be implausibly large to account for factorless income. It is the third potential explanation that turns out to be the most promising.