Industry concentration in Europe and North America

Bajgar, Matej; Berlingieri, Giuseppe; Calligaris, Sara; Criscuolo, Chiara; Timmis, Jonathan

doi:10.1093/icc/dtac059

Cited by 33 publications

(53 citation statements)

References 35 publications

(22 reference statements)

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“…Bajgar et al (2019) andKalemli-Ozcan et al (2019) document similar patterns for European countries as well, focusing on consolidated firm accounts.3Calligaris et al (2018) and De Loecker and Eeckhout (2018) document similar patterns for various other countries as well.…”

mentioning

confidence: 83%

What Happened to US Business Dynamism?

Akcigit

Ates

2023

Journal of Political Economy

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In the past several decades, the U.S. economy has witnessed a number of striking trends that indicate a rising market concentration and a slowdown in business dynamism. In this paper, we make an attempt to understand potential common forces behind these empirical regularities through the lens of a micro-founded general equilibrium model of endogenous firm dynamics. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting "best versus the rest" dynamics. We focus on multiple potential mechanisms that can potentially drive the observed changes and use the calibrated model to assess the relative importance of these channels with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in the hands of firms with the largest stock and a changing nature of patents, especially in the post-2000 period, which suggests a heavy use of intellectual property protection by market leaders to limit the diffusion of knowledge. These findings present a potential avenue for future research on the drivers of declining knowledge diffusion.

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confidence: 83%

What Happened to US Business Dynamism?

Akcigit

Ates

2023

Journal of Political Economy

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“…Doing so, I find that concentration has increased by around 2 percentage points since the mid‐2000s (Panel A). This is smaller than the increases documented for Europe and North America over this period (Bajgar et al ., 2019). There is also some evidence that concentration is lower when measured using employment, and has potentially displayed a smaller increase, which is indicative of increasing mark‐ups (Edmond et al ., 2019; see Appendix ).…”

Section: Background and Motivationmentioning

confidence: 99%

“…Meanwhile, De Loecker and Eeckhout (2018) and Diez et al (2019) document substantial increases in mark-ups globally over the past three decades. Several papers have also documented increases in the degree of industry concentration, including Autor et al (2020) and Grullon et al (2019) for the USA, and Bajgar et al (2019) for Europe and North America.…”

Section: Background and Motivation (I) International Literature And E...mentioning

confidence: 99%

Product Market Competition and its Implications for the Australian Economy*

Hambur

2022

Economic Record

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This paper documents firm mark‐ups and competition in Australia, and their impact on productivity, using administrative data. I find that mark‐ups increased by around 5 per cent since the mid 2000s, less than previously documented for Australia and slightly less than documented for the average advanced economy. While part appears to reflect technological change, part appears to reflect an increase in market power. This increase appears to explain part of the slowdown in productivity growth observed in Australia over the past decade, by slowing the efficient reallocation of resources from low productivity to high productivity firms.

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“…De Loecker et al (2020) provide evidence of a substantial increase in markups in the US since the 1980s. The empirical results in De Loecker and Eckhout (2020), Bajgar et al (2019), and Diez et al (2021) suggest that the increase in markups is a global phenomena. Why are firms becoming more powerful?…”

Section: Introductionmentioning

confidence: 97%

“…Our work is related to the recent literature on the dynamics of market power and its possible sources. De Loecker et al (2020), Autor et al (2020), and Bajgar et al (2019) document a remarkable increase in market power, measured as markup and concentration, in the US and Europe in the last three decades. De Loecker and Eckhout (2020) and Diez et al (2021) show evidence suggesting that this trend is global -though differing in the size of the observed changes.…”

Section: Introductionmentioning

confidence: 99%