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The Impact of Superstar Firms on the Labor Share: Evidence from Belgium

Filip Abraham () and Yannick Bormans ()
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Filip Abraham: KU Leuven and Vlerick Business School
Yannick Bormans: KU Leuven

De Economist, 2020, vol. 168, issue 3, No 3, 369-402

Abstract: Abstract The Belgian labor share, measured as the part of GDP going to labor, is declining. This fits into the global secular trend of decreasing labor shares. A novel strand in the literature focusses on its granular drivers. Recent research in the United States suggests that superstar firms, defined as large firms with a dominant market share, are increasing their market share and relate this to the fall of the labor share (Autor et al. in Q J Econ 135(2):645–709, 2020). Using a long time series of Belgian firm-level data from 1985 to 2014, we provide evidence for the link between the rise of market concentration and the decrease of the labor share in its two largest sectors: Manufacturing and Wholesale & Retail. These two sectors represent approximately half of the Belgian economy. We do not find evidence in other Belgian sectors.

Keywords: Labor share; Superstar firms; Market concentration; Firm-level data (search for similar items in EconPapers)
JEL-codes: D33 D43 E25 F66 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10645-020-09365-y

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Handle: RePEc:kap:decono:v:168:y:2020:i:3:d:10.1007_s10645-020-09365-y