Scale, market power and competition in a digital world: Is bigger better?

Michael McMahon, Sara Calligaris, Eleanor Doyle and Stephen Kinsella ()
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Michael McMahon: OECD
Sara Calligaris: OECD
Eleanor Doyle: Cork University Business School

No 2021/01, OECD Science, Technology and Industry Working Papers from OECD Publishing

Abstract: This report assesses the impact of digitalisation on competition by examining the evolution of mark-ups and multifactor productivity (MFP) across firms of different sizes. It finds that size is positively related to mark-ups and that this relationship has strengthened over time. This trend has been accompanied by an increase in the relative productivity advantage of larger firms and both changes are more pronounced in digital-intensive sectors, suggesting that digitalisation may be an underlying driver. Policy makers may need to consider appropriate responses if digital technologies affect larger and smaller firms in a heterogeneous manner.

Keywords: Digitalisation; Intangible Assets; Mark-ups; Market Power; Multifactor Productivity; Scale (search for similar items in EconPapers)
JEL-codes: D2 D24 L1 L2 O33 (search for similar items in EconPapers)
Date: 2021-01-18
New Economics Papers: this item is included in nep-eff, nep-ict and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:oec:stiaaa:2021/01-en

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