Global declining competition?

Federico J. Díez, Jiayue Fan and Carolina Villegas-Sánchez

Journal of International Economics, 2021, vol. 132, issue C

Abstract: Using a new firm-level dataset on private and listed firms from advanced economies and emerging markets, we document four stylized facts on market power in global markets. First, competition has declined, but only modestly—average markups increased from 1.22 to 1.29 (6%) during 2000–2015, especially in services and in advanced economies. Second, the markups of listed firms are higher and experienced stronger increases than those of private firms. Third, the markup increase is driven by firms in the top decile of the markup distribution (which includes both large and small firms), and there is a U-shaped relation between firm size and markups. Finally, the increase is mostly driven by increases within incumbents and, to a lesser extent, by market share reallocation towards high-markup entrants.

Keywords: Markups; Market power; TFP; Firm size (search for similar items in EconPapers)
JEL-codes: D2 D4 E2 F6 L1 L4 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:132:y:2021:i:c:s0022199621000696

DOI: 10.1016/j.jinteco.2021.103492

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