Market power, output, and productivity

Alberto Rivera-Padilla

Economics Letters, 2023, vol. 232, issue C

Abstract: I document a positive correlation between increases in markups and growth of output, value added, and labor productivity at the 3-digit sector level using national accounts data from Mexico. Additionally, I show that those results can be partly accounted for by the positive correlation between increases in markups and total factor productivity growth. Taken together, the findings provide new evidence that a rise of market power can be associated with positive welfare effects and not only with negative outcomes of reduced competition.

Keywords: Markups; Market power; Productivity; Growth (search for similar items in EconPapers)
JEL-codes: D2 D4 E2 L1 O4 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:232:y:2023:i:c:s0165176523003439

DOI: 10.1016/j.econlet.2023.111318

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