The Great Start-up Sellout and the Rise of Oligopoly

Florian Ederer and Bruno Pellegrino

AEA Papers and Proceedings, 2023, vol. 113, 274-78

Abstract: We document a secular shift from initial public offerings to acquisitions of venture capital-backed start-ups and show that this trend is accompanied by an increase in the opportunity cost of going public over the last quarter-century. Dominant companies that are disproportionately active in the corporate control market for start-ups have become more insulated from the pressures of product market competition over the same period. These facts are consistent with the hypothesis that start-up acquisitions have contributed to rising oligopoly power.

JEL-codes: D43 G24 G32 G34 L13 M13 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1257/pandp.20231024

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