Market power and sustainability: a new research agenda

Abstract

Perfectly operating markets only exist in theory. Market failures are known to not only inhibit the proper functioning of the market, but also affect sustainability and thus a sustainability transition. In this regard, much attention has been paid to externalities or missing markets, even though these are not the only market failures. In this paper, we argue that market power and its relationship with sustainability has been neglected, despite the fact that, back in 1931, Hotelling indicated the connection between the two concepts. However, research that has been dealing with this connection has not been comprehensive and has only looked at one aspect of sustainability and market power. Due to the rising relevance of market power as well as of sustainability concerns, the connection between the two deserves thorough attention. Accordingly, we propose initiating a new interdisciplinary research agenda to comprehensively analyze the complex relationship between market power and sustainability.

Promotion of Sustainable Development in the EU: Social and Economic Drivers

“…The hypothesis that economic freedom promotes sustainable development confirmed. When Economic Freedom Index rises by 1 point, the SDG index grows on average by 0.12 This result is similar to K. Biely and S. van Passel, who stated that free market-driven economies promote sustainability, whereas a market failure discourages such development [42]. Likewise, economic freedom stimulates sustainable growth in the middle-income group of countries, according to [43].…”

Modern entrepreneurship and the ‘doughnut’: productive or destructive?

“…Moreover, the notion of market share and market efficiency are intricately linked with market power concept. As indicated by Biely and van Passel (2022), this concept also holds sway over sustainability and its progression, encompassing environmental considerations. This stems from the potential of market power to influence the safeguarding of resources, as previously discussed, and to stifle innovation, as observed with influential tech giants (e.g., Tesla).…”

Connectivity of Sustainability Goals among Beef Cattle Producers in Peninsular Malaysia: Structural Equation Modelling Approach

“…In summary, the pillars works on connecting each other and act individually. Market concentration and sustainability is a new research agenda (Biely & Passel, 2022). Imported cattle market structure is high concentrated (refer Table 1.0).…”

“…According to Murphy (2006), market power is also the ability to reduce competition. Reduce competition can be the installation of entry barriers, starting off price wars, setting standards, or lobbying (Biely, 2020). The most important parts, market concentration in agricultural field as livestock looks like hourglass where a large number of producers at the base sell to a small number of processors and distributors and supermarkets in the middle, who sell to a very large number of consumers at the top (Murphy, 2006).…”

“…Unfortunately , no general statement can be made, whether market power inhibits or supports a transition of sustainability or not. This depends on many unrevealed factors (Biely & Passel, 2022). But, competitiveness of the sustainability element is closely related to the concept of inclusive growth, which looks at how countries can simultaneously achieve economic growth and having balance socio-environmental outcomes (Andreoni & Miola, 2016).…”